Capital inflows into Sub-Saharan Africa to slow down, says World Bank

According to the World Bank, investment and capital inflows into Sub-Saharan Africa will continue to slow down as European banks begin looking to Asia for lending activities.This will be further compounded by low commodity prices and worsening economic conditions, as well as currency depreciation in key markets and increasing political tension. The World Bank, in its Global Economic Prospects: Divergences and Risks June 2016 report, said:

"Overall, capital inflows to the region fell from their record level in 2014, led by a decline in cross-border bank lending. European banks have increasingly deleveraged and oriented their lending activities toward developing Asia."

The global lender said the re-balancing in China, lower commodity prices and deteriorating growth prospects in many commodity exporters would result in further declines in foreign direct investment. It added that activity is expected to remain weak in Sub-Saharan Africa's three largest economies during this year, and cut the region's growth outlook down to 2.5%.

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