Analysis of Capital Flight from Burundi
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Date
2017-10-05
Authors
Ndoricimpa, Arcade
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
Burundi has reportedly lost resources amounting to 10.2% of gross domestic product
to capital flight, on average, over the period 1985–2013. Given the episodes of political
instability and poor governance that have characterized Burundi’s landscape in the past
decades, an institutional analysis of capital flight is undertaken and some instances of
embezzlement of public funds reviewed in this study. Data analysis of the main trends
of capital flight is also undertaken. In addition, this study examines the drivers of capital
flight from Burundi. The estimation results seem to be sensitive to the capital flight
measurement used, but in general they suggest that external debt, political instability and
wars, as well as exports, are the main drivers of capital flight from Burundi. To discourage
capital flight, the findings of this study suggest that Burundi should promote peace and
political stability. In addition, more responsibility, transparency and accountability are
required from the Government of Burundi in managing external debt. Moreover, some
actions are needed to reduce trade misinvoicing, which is a major channel of capital
flight from Burundi.
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Keywords
Burundi