Capital Flight from Africa, 1970-2018: New Estimates with Updated Trade Misinvoicing Methodology

Abstract

This report presents updated estimates of capital flight from 30 African countries over the period 1970-2018. Over this 49-year time-frame, this group of countries lost a combined $2 trillion through capital flight. Net misinvoicing of exports and imports contributed $588 billion to total capital flight. It is estimated that the stock of offshore wealth accumulated from capital flight reached $2.4 trillion in 2018, assuming that capital outflows earned the equivalent of the modest US Treasury Bill rate in destination territories. This far exceeds the $720 billion of external debt owed by this group of countries as of 2018. In this sense, these African countries are a ‘net creditor’ to the rest of the world. The evidence suggests that capital flight remains a major obstacle to development financing in Africa, and it calls for urgent action to stem the financial hemorrhage and to devise strategies to repatriate stolen assets stashed offshore.