Enhancing absorption capacity, attracting and managing capital flows : chapter 6

Abstract

This report examines the capacity of African countries to absorb foreign capital and discusses policies to manage capital flows so as to maximize the benefits while minimizing the risks of financial fragility and other adverse effects. A country’s capacity to absorb foreign capital depends on many factors, including the quality of the labour force, the availability and quality of the infrastructure, the depth and efficiency of the financial system, and the overall institutional and policy environment.