The Conversation
International · 4 hrs ago
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Africa’s capital must stay home to plug its financing gap: how it could be done
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African nations are investing their reserves in low-return Western financial instruments while paying high interest rates to external investors, potentially constraining their own development. The article proposes keeping African capital domestic to address financing gaps.
Africa’s capital must stay home to plug its financing gap: how it could be done
Africa is providing cheap liquidity to wealthy nations. In return it is paying huge interest rates to external institutional investors at the cost of its own development.
For instance, African central banks export their reserve funds for safekeeping. Sovereign wealth funds and pension fund managers invest only in investment-grade European and United States institutions. The most popular one is risk-free US treasuries, where they earn 3.5% annually on average. These are perceived as the safest in
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