Abstract and Keywords
This chapter examines international capital flows to Africa, focusing on the role of foreign aid and foreign direct investment (FDI) in the socioeconomic development of Sub-Saharan Africa (SSA). The effects of these flows, aid in particular, have been the subject of polarizing arguments in the economic literature. This chapter seeks to refocus the debate on how to make aid and FDI work better for Africa without extreme generalizations that can be misleading. After documenting the evidence on the factors that tend to undermine the effectiveness of these flows as well as examples of countries that have successfully used such flows for development, we highlight possible policy implications for African leaders as well as their development partners. These include the true commitment of African leaders to work for their people and genuine efforts by foreign providers of capital and all interested in international development towards improving economic and political governance.
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