Foreign direct investment (FDI) flows from the European Union (EU-27) to Sub-Saharan Africa were EUR 11.5 billion in 2010 and this was a decline from EUR 13.1 billion the previous year; and these flows of FDI were mainly to South Africa.5 To Africa as a whole, FDI inflows reached Euro 21.3 billion in 2010.
Controls on financial transactions will often be required, and eventually, controls over parts of the real side of the economy may be needed to maintain the fixed nominal exchange rate. Authorities who ignore these constraints, or who lack the fiscal discipline required by a fixed exchange rate regime, can end up creating uncertainty and the very volatility that they were trying to avoid.