Private capital inflows in Africa pose no threat to economic stability.
Private capital inflows to sub-Saharan African countries increased in the 1990s, raising concerns about economic stability. The study looked at factors that could lead to financial crises, like rapid credit growth and low foreign reserves. It found that while some countries faced pressure for their currency to rise in value, overall, managing private capital inflows did not seem to be a major issue. However, large trade deficits could worsen if currencies appreciate too much.