1. From bear to bull? Sub-Saharan Africa and Global Capital Markets
- Author:
- Sam Jones
- Publication Date:
- 01-2008
- Content Type:
- Policy Brief
- Institution:
- Danish Institute for International Studies (DIIS)
- Abstract:
- The current boom in global commodity prices and the expansion of Chinese interests in sub-Saharan Africa are part of a general warming of external investors to the region. This policy brief examines trends in commercial financial instruments such as equities, bonds and commercial bank lending and their impact on economic development. It reviews the nature and behaviour of these instruments in developing countries compared with more traditional development finance, such as foreign aid. This provides a foundation for analysing past and present trends in sub-Saharan Africa. It is argued that, like many other low income countries in the past, sub-Saharan Africa has received negligible inflows of external commercial financing. If anything, the region has been additionally excluded from these flows due to very weak levels of financial sector development even compared to other low income countries. At the same time, recent changes in global and domestic conditions mean that the situation is evolving rapidly. There is mounting evidence to show that many economies in sub-Saharan Africa are enjoying significantly expanded access to commercial external capital flows. Given good prospects that this trend will continue, the playing field for traditional donors is likely to alter significantly. The brief concludes by reflecting on how donors might respond to these emerging policy challenges.
- Topic:
- Development, Markets, and Non-Governmental Organization
- Political Geography:
- Africa and China