Thesis (MDF)--Stellenbosch University, 2006. / Capital flight is a serious problem for Namibia as well as other countries. If not addressed, it
will continue to impede national investment, macro-economic management and economic
growth. These issues are particularly pertinent to Africa in view of it is high incidence of capital
flight in the presence of foreign exchange constraints, limited foreign capital flows, external
indebtedness and high dependence on overseas development assistance.
The purpose of the study is to determine the magnitude and determinants of the capital flight
burden in Namibia for the period 1990-2005. The study consists of a literature review,
identifying an appropriate model for the capital flight burden in Namibia, data collection, and
estimating and testing of the model using secondary data from Namibia.
The study adopts two approaches to measure the extent of capital flight from Namibia: the
residual approach and the Morgan Guaranty Trust method which is modified from the residual
method of calculating capital flight. The residual method is an indirect approach based on a
comparison between sources of capital inflows with the uses of these inflows. This approach
was changed by Morgan Guaranty to include an additional item, the change in short-term foreign
assets of the domestic banking system.
The estimates from the study indicate capital reversal from Namibia over the IS-year period,
averaging U$88.2 million using the residual method and U$200.4 million using the Morgan
Guaranty method. The findings, although different from the picture on the ground, create a very
good base for future research on capital flight in Namibia, which tends to be more uniformly
related to portfolio diversification. The results from the three main model variants are
unequivocal and indicate that an increase in aid and concessional grants tends to reduce the
capital flight burden, while on the other hand the burden is seriously increased by depreciation of
the Namibian dollar and an increase in inflation. These results have important implications for
the Central Bank and the Treasury in tenns of strategic economic policy reforms.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/21981 |
| Date | 12 1900 |
| Creators | Naanda, Sara Ndapewa Mutaleni |
| Contributors | Murinde, Victor, Stellenbosch University. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | 75 p. : ill. |
| Rights | Stellenbosch University |
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