This is an analysis of capital flows to and from Africa which presents a stunning paradox. On the one hand, African countries are heavily indebted and must make difficult decisions with regard to the allocation of national resources between debt payments and provision of vital social services to their populations. Over the past decades, African countries have been forced by external debt burdens to undertake painful economic adjustments while devoting scarce foreign exchange to debt-service payments. On the other hand, African countries have experienced massive outflows of private capital towards Western financial centers. Indeed, these private assets surpass the continents foreign liabilities, ironically making sub-Saharan Africa a net creditor to the rest of the world (Boyce and Ndikumana 2001). Compared to other developing regions, Africans tend to exhibit a significantly higher preference for foreign assets relative to domestic assets; hence Africa has the highest proportion of private assets held abroad (Collier, Hoeffler, and Pattillo 2001).