THE MAGNITUDE AND DETERMINANTS OF CAPITAL FLIGHT - THE CASE FOR 6 SUB-SAHARAN AFRICAN COUNTRIES

Most studies treat capital flight as an exclusively Latin American pro blem. This paper estimates capital flight for six African countries an d shows that the emphasis on Latin American capital flight is not corr ect. It appears that the burden of capital flight is also important fo r many African countries. Moreover, this paper tries to find some dete rminants for the African countries' capital flight. The increase of go vernment and government-guaranteed foreign debt and the overvaluation of the real exchange rate appear to be the most important explanatory factors of capital flight for the African countries in this study.