An Empirical Investigation of Capital Flight from Zimbabwe

This paper investigates the causes of capital flight from Zimbabwe for the period 1980 to 2005. The results show external debt, foreign direct investment inflows, and foreign reserves to be the major causers of capital flight. Economic growth is negatively correlated with capital flight. The calculations estimate Zimbabwean capital flight at US $10.1 billion over the 1980 to 2005 period, with capital flight-to-GDP ratio roughly 5.4 per cent. In other words, for every US dollar of GDP accumulated by Zimbabwe annual from 1980 to 2005, private Zimbabwean residents accumulated (US) 5.4 cents of external assets annually during the same period.