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Policy Brief on Financial Crisis - The Financial Crisis and Access to Financing
Africa’s access to international capital has been substantially reduced as a result of the financial crisis. Foreign lines of credit have virtually closed. Local African banks that have relied on credit lines from the international capital markets have had to scale back operations or have turned to alternative sources of financing from regional development banks, such as the African Development Bank. Private capital flows, which have recently overtaken Official Development Assistance (ODA) in Africa (increasing from US$ 29 billion in 2000 to US$ 52.98 billion in 2007) are now severely at risk of drying up as a result of the financial crisis. Similarly, remittances have already started to decline significantly due to the economic down turn in developed and emerging economies.