Capital Flight from Angola, Côte d’Ivoire, and South Africa

Abstract

Chapter 2 presents quantitative estimates of capital flight for the three case study countries: Angola, Côte d’Ivoire, and South Africa. In addition, it delves into one of its important elements, trade misinvoicing. The latter can lead to upward or downward revisions of capital flight measures derived from the balance-of-payments residual, depending on the relative magnitudes of misinvoicing for capital flight and misinvoicing for tariff evasion. Prolonged capital flight has led to the accumulation of massive offshore wealth in the hands of the economic and political elites of these countries, even as their populations continue to face deprivation in access to basic services. In all three African countries, capital flight is a major obstacle to development financing that needs to be tackled through coordinated national and international strategies.