Measurement Determinants And Consequences Of Capital Flight In Sub-saharan African Countries

Contrary to the theory of capital movement. Capital is flying from capital scarce developing countries to capitalrnAbundant developed connives. The study therefore attempts to investigate the capital flight issue in fourteenrnSub-Saharan African countries. more specifically this study aims to: examine the size and magnitude of rnCapital flight using alternative methods of measurement. Analyze the economic factors responsible for capitalrnFlight and assess the consequences of capital flight on the domestic economy using econometric technique.rnAs found out that the size of capital flight is very large for fourteen sub-Saharan African countries especiallyrnFor Nigeria Ethiopia and cote levier. Using a panel co integration technique it is observed that the factorsrnDetermining capital flight are many and pray from long-to short run. Moreover it is shown econometrically thatrnCapital flight has negative impact on the sample countries.rnFrom the estimate it can be inferred that policy makers in sub Saharan African countries must pay morernAllenton on their foreign capital utilization exchange rate policy. Domestic credit policy and overall economicrnPolicies that aim at accelerating growth if these countries are to benefit from capital flight reversal. rnKey Words: Capital Flight: Sub-Saharan Africa: Panel co integration: portfolio selection

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