A recent study by Canadian scholars
estimates that South Africa alone may have lost up to $1.4 billion due
to the export of medical doctors to Australia, Canada, the United
Kingdom and the United States.[1] In turn, the UK may have gained up to
$2.7 billion from the services of doctors from the nine sub-Saharan
countries surveyed in the study.[2] Some observers argue that the
remittances sent home by migrant doctors are a form of returns to
investment in their education; some even claim that the sending African
countries receive official development aid from the host countries that
contributes to financing the training of doctors, among other things.
However, these inflows fade in comparison to the losses due to migration
of skilled health care professionals. The same holds for other
professional areas beside the medical field. In general, there is a net
transfer from Africa, making the continent a ‘net financier’ of the rest
of the world.
Parallel to this exodus of human capital is the illicit export of financial capital from African countries – or capital flight. This is not a new phenomenon, and it shows no signs of abating.
Over the past four decades, sub-Saharan Africa has lost a staggering $700 billion due to capital flight. In addition to trade misinvoicing, smuggling, and embezzlement of revenues from natural resource exports, a substantial part of the capital flight was financed by external borrowing. We estimate that every year 40 to 60 cents of each borrowed dollar spins out of the revolving door as capital flight, often returning to the same banks that issued the loans. On net basis, Africa is transferring more money to the rest of the world than it is receiving in terms of borrowing and aid. Once again, Africa is net financier to the rest of the world rather than the other way around as commonly perceived. And unlike in the case of human capital exodus, financial capital flight generates absolutely no flows in the reverse direction; it is an unmitigated loss to the continent.
Read more: http://triplecrisis.com/africa-specializing-in-capital-exodus/
Parallel to this exodus of human capital is the illicit export of financial capital from African countries – or capital flight. This is not a new phenomenon, and it shows no signs of abating.
Over the past four decades, sub-Saharan Africa has lost a staggering $700 billion due to capital flight. In addition to trade misinvoicing, smuggling, and embezzlement of revenues from natural resource exports, a substantial part of the capital flight was financed by external borrowing. We estimate that every year 40 to 60 cents of each borrowed dollar spins out of the revolving door as capital flight, often returning to the same banks that issued the loans. On net basis, Africa is transferring more money to the rest of the world than it is receiving in terms of borrowing and aid. Once again, Africa is net financier to the rest of the world rather than the other way around as commonly perceived. And unlike in the case of human capital exodus, financial capital flight generates absolutely no flows in the reverse direction; it is an unmitigated loss to the continent.
Read more: http://triplecrisis.com/africa-specializing-in-capital-exodus/
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