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Sub-Saharan Africa’s “frontier markets”—the likes of Ghana, Kenya, Mauritius, and Zambia—were seemingly the destination of choice for an increasing amount of capital flows before the global financial crisis. Improving economic prospects in these countries was a big factor, but frankly, so too was a global economy awash with liquidity.
Then the crisis hit. And capital—particularly in the form of portfolio flows—was quick to flee these countries as was the case for so many other economies.
Fast forward to 2011. Capital flows are coming back to the frontier, but in dribs and drabs. (more…)
Filed under: Africa, Economic outlook, IMF, International Monetary Fund | Tagged: capital controls, capital flows, capital inflows, equity investments, fixed-income investments, foreign direct investment, frontier markets, global financial crisis, liquidity conditions, Macroeconomic policies, macroprudential policies, net private capital flows, portfolio flows, Regional Economic Outlook: Sub-Saharan Africa, shallow financial markets, Sub-Saharan Africa | 1 Comment »