Research from ODI’s “Shockwatch” series shows the change in private capital flows in sub-Saharan Africa over the past decade, with nearly one third of all private capital flows now being comprised of portfolio equity and bonds flows.
The study shows a significant shift from 2001 when almost 100% of private capital flows to sub-Saharan Africa took the more traditional form of FDI, which is more stable than other capital flows. FDI has more than doubled over the last 10 years from $15 billion in 2001 to $37 billion in 2011 with BRICS countries accounting for a quarter of the total by 2010.
Dirk Willem te Velde, Head of the International Economic Development Group at the ODI said: “Organizations such as the IMF have downgraded Europe’s growth forecasts once more, but they continue to contribute to a sense of optimism around African markets with African growth forecasts well above the average of developing countries. Our research shows that investors have certainly responded to this optimism.”
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