Boost in capital inflows
PRIVATE CAPITAL INFLOWS to subSaharan Africa soared by more than 600% between 2000 and 2007. That’s the finding of a new research report published by the International Monetary Fund.
The report says: “In the period from 2000 to the recently ended boom on global financial markets, inflows of private capital became the most important source of external financing for (the region). On average, between 2001 and 2007 total gross inflows to the region increased by 32% annually – the rate accelerating to 44% after 2005.”
The IMF notes: “Private capital inflows to sub-Saharan Africa rose from about US$15bn in 2000 to about $84bn in 2007. Recorded private capital outflows on the whole were much smaller than inflows, so that in 2007 net inflows to… amounted to around $76bn.”
The IMF reports, critically: “As of 2007 private capital flows represented 10% of the region’s gross domestic product and about twice the volume of official development assistance ($40bn).” Official assistance is finance provided directly by governments of rich developed nations or – ultimately the same story – by global organisations overwhelmingly supported by wealthy industrial countries.
The massive surge in private capital inflows to the region – at least until the major international economic setback – in part reflected the great progress made overall (Zimbabwe and some others aside) in the region. But the inflows were naturally essentially related to self-interest, not charity.