Africa is providing cheap liquidity to wealthy nations. In return it is paying huge interest rates to external institutional investors at the cost of its own development.
For instance, African central banks export their reserve funds for safekeeping. Sovereign wealth funds and pension fund managers invest only in investment-grade European and United States institutions. The most popular one is risk-free US treasuries, where they earn 3.5% annually on average. These are perceived as the safest instruments, easily convertible to cash without losing value.
