Capital Inflows and Macroeconomic Policy in Sub-Saharan Africa

Little has been written about capital flows to sub-Saharan Africa (SSA), largely because of the flows’ small size
and data limitations. In this working paper, Louis Kasekende, executive director for policy and research at the
Bank of Uganda; Damoni Kitabire, commissioner for the Macroeconomic Policy Department for the Ministry
of Finance and Economic Planning in Kampala; and Matthew Martin, Ministry of Finance, United Kingdom, explore these
inflows, noting that although they are small compared to those into other countries, they are in proportion to the
size of the recipient economies. The authors examine the scale and composition of capital inflows, their
causes and sustainability, their effect on macroeconomic stability, and their responsiveness to policy measures
for six SSA nations: Kenya, South Africa, Tanzania, Uganda, Zambia, and Zimbabwe.