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Capital Flight from Natural Resource-Dependent African Countries: Updated Estimates and Analysis for the Cases of Cameroon, Ghana, and Zambia, 1970-2021

Abstract

This paper is part of a project that investigates domestic and global drivers and enablers of capital flight from Cameroon, Ghana, and Zambia, three countries that are significantly endowed in natural resources. It presents estimates of capital flight from these three countries and discusses the key drivers of the phenomenon. The results show that as of 2021, estimated total capital flight stood at $71.1 billion for Cameroon, $50 billion for Ghana, and $71.5 billion for Zambia. External borrowing and, in the cases of Zambia and Cameroon, trade misinvoicing, are key correlates of capital flight. While external borrowing directly and indirectly drives capital flight, trade misinvoicing constitutes an important mechanism of unrecorded cross-border capital flows. This study contributes to the efforts to uncover the mechanisms and enablers of capital flight from Africa, with the aim of shedding light on possible strategies to curb further capital outflows in the context of efforts to scale up and diversify development financing to support recovery from global crises, the transition to green growth, and sustainable development in Africa.

This paper is a product of a research project funded by a grant from the 2021 Andrew Carnegie Fellowship from Carnegie Corporation of New York, which is very much appreciated by the Principal Investigator (Léonce Ndikumana). The project examines domestic and global drivers of capital flight from Africa focusing on natural-resource rich countries using Cameroon, Ghana, and Zambia as case studies. Other working papers under the project can be found here: https://peri.umass.edu/research-areas/african-development-policy

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