According to the Outlook, external financial flows have quadrupled since 2000 and are projected to reach over $200 billion in 2014.
“Their composition has also changed progressively with foreign investments and remittances from non-OECD countries underpinning this positive trend,” it noted.
The 2014 Outlook, published by the AfDB, the Organization for Economic Coorperation and Development (OECD) and the United Nations Development Programme (UNDP) indicated that foreign investment – direct and portfolio – had fully recovered from the 2009 economic crisis and is projected to reach over a record $80 billion in 2014, making it the largest financial flow to Africa.
According to the report, official remittances have been continuing their increasing trend since 2009 and are projected to reach $67.1 billion in 2014.
It however said, “in contrast, official development assistance’s (ODA) share of total external flows keeps diminishing, from 38% in 2000 to 27% in 2014 (estimated at $55.2 billion),” adding that, “despite this downward trend, ODA still represents the largest external financial flow to low-income African countries.”
The report identified that tax revenues continue to increase in Africa and reached $527.3 billion in 2012. It however cautioned that taxes should not be seen as an alternative to foreign aid but as a component of government revenues that grows as countries develop.
By Emmanuel K. Dogbevi