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External financial flows and tax revenues play an increasingly important role in Africa's development and economic growth prospects. External financial flows have quadrupled since 2000 and are projected to reach over USD 200 billion in 2014. Their composition has also changed progressively with foreign investments and remittances from non-OECD countries underpinning this positive trend. Foreign investment - direct and portfolio - has now fully recovered from the 2009 economic crisis and is projected to reach over a record USD 80 billion in 2014, making it the largest financial flow to Africa. Though resource rich countries remain the prime destination for foreign direct investment (FDI) to Africa,manufacturing and services attract an increasing share of the over 750 new greenfield FDI projects. Official remittances have been continuing their increasing trend since 2009 and are projected to reach USD 67.1 billion in 2014. In contrast, official development assistance's (ODA) share of total external flows keeps diminishing, from 38% in 2000 to 27% in 2014 (estimated at USD 55.2 billion). Despite this downward trend, ODA still represents the largest external financial flow to low-income African countries. Tax revenues continue to increase in Africa and reached USD 527.3 billion in 2012. They should not be seen as an alternative to foreign aid but as a component of government revenues that grows as countries develop.

Figure 2.1 Total external financial flows to Africa (billion USD, current)

Figure 2.1 Total external financial flows to Africa (billion USD, current)

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