In This Review

Africa's Odious Debts: How Foreign Loans and Capital Flight Bled a Continent (African Arguments)
Africa's Odious Debts: How Foreign Loans and Capital Flight Bled a Continent (African Arguments)
By Leonce Ndikumana, James Boyce
160 pp, Zed Books, 2011
Purchase

The numbers are startling. From 1970 to 2008, the combined foreign debt of African countries rose from less than $50 billion to more than $200 billion in constant dollars. During the same time, capital flight from the 33 sub-Saharan African countries for which decent data exists totaled $735 billion. In this arresting analysis, two economists show that those numbers are closely related. A large proportion of the publicly contracted debt was siphoned off by individuals, often in key policymaking roles, and then expatriated for private gain. Ndikumana and Boyce estimate that as a result, Africa, the world’s poorest region, is actually a net creditor to the rest of the world. Much of this lively and readable book is concerned with the combination of sheer incompetence, delusion, corruption, and regulatory failure that led Western banks and financial institutions to lend money to the region, even though it would obviously never be repaid. The book makes a compelling case that because of the way it was created, this “odious” debt should not be repaid today. Of course, the more important practical issue for Africa is how to bring about the repatriation of all that squandered capital.