How can Africa attract different forms of capital flow: theoretical perspectives

Abstract

This paper explores the capital flow landscape in Sub Saharan Africa and other regions and reviews the capital flow theory and its allocation puzzle. The different mechanisms in which the volume and structure of capital flow can be increased are discussed. It concludes by presenting a modified theoretical model to guide the policy makers’ decisions process in designing pro-growth incentive mechanism to attract more capital to region.

Keywords

• Capital Allocation Puzzle
• Capital flow
• Sub Saharan Africa