Capital flows: A pan-African capital windfall

The enthusiasm about Africa’s status as the last investment frontier can be cooled by the thought that most of the capital is controlled outside the continent. The proverbial western hedge fund, it is feared, would soon pull out if investment from the proverbial Chinese oil company dried up.

But as global capital inflows proliferate, there are now signs that investment between African countries is growing.

Perhaps the purest example of this is the move by Kenya Commercial Bank to expand into the south of Sudan. Southern Sudan has been blighted by decades of war. It lacks even the most basic economic building blocks, such as roads. The war, however, is more or less over. So Kenya Commercial Bank, which is controlled by Kenyan investors, opened in southern Sudan in 2006. It has three branches there.

There are less extreme cases. Ecobank, for example, originally Togolese, is listed in...