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Is foreign direct investment driving capital flight from Africa? Real News interviews Léonce Ndikumana on a recent UNU-WIDER study

Countries with high natural resources attract a lot of FDI, this combined with bad governance creates high incentives for capital flight as there are opportunities to embezzle the proceeds and channel them into private assets and wealth held abroad.

Real News interviewed Léonce Ndikumana, director of the Foreign Policy Programme at the Political Economy Research Institute (PERI), on a recent WIDER Working Paper on capital flight from sub-Saharan African countries authored by Ndikumana and Mare Sarr from University of Cape Town’s School of Economics. 

Their study finds that capital flight from sub-Saharan African countries has accelerated in the past two decades even as economic growth and FDI have increased. Ndikumana and Sarr suggest that to stop capital flight the management of revenue from natural resources needs to become more transparent so that government and industry can be held to account.

Watch the interview on Real News website

Part 1/2

Part 2/2

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WIDER Working Paper 'Capital flight and foreign direct investment in Africa' is part of UNU-WIDER's Extractives for development project.