countries while interest rates scared abroad. In fact, with the excertion of few countries such as Erypt, Ghana, Kenya, Mauritania, Mauritius, Somalia, Swazilanc, Tunisia and Ufanda, interest rates were kept unchanfe c. This pel icy of low nominal interest rates reflects the priority fiven by the authorities to specific pro6uctive sectors, as well as their concern with the increasin[ cost cf internal borrowinr for the rovernment budfet. 21. The prevalence of nerati ve real interest rates in many cases adversely affected the eYternal position by encourafinr private capital outflows. Althouph difficult to auantify, even in countries with strict capital controls, there is si['Tlificant scope for such outflows throurh smupflinr or false invoicinr of trade transactions, in search of more lucrative investment pos­sibilities abroac where interest rates are hi[her. 22. The eYpansionary financial policies follower in many countries, couple(: with supply shortares resultinf from balance- of-payments difficulties, contrilured tc a sharp price increase in 1981. The averare annual increase in consumer prices ·in 37 African countries was 25.4 per cent, comparee to 15.5 per cent in 1980. This increase was, nevertheless, a relative irrrrovement over 1979, when prices rose by 28.1 per cent. At the same time, it must be borne in min6 that these averares overstate the typi­ cal rates of inflation in most countries, since the weiphted averare of price movements is stronply affected by exceptionally hifh rates of inflation in a few cf the lareer countries such as Ghana (116.5 per cent), Uranca (75 per cent), Za~re (34.9 per cent) and Niferia (20.8 per cent). Inceec, the mecian rate of consumer price inflation was relatively stable and well below the averace rate, at about 12 per ent cent over the period 1979-1980. 23. In addition to eYcess monetary liouidity, the main cause of price increases in many countries in 1981 can be founr on the 
**Analysis**
The text appears to be discussing the economic situation in various African countries, specifically the impact of monetary policy, interest rates, and inflation on the economy. The text mentions the government's priorities, balance of payments, and trade transactions, suggesting that the category should be related to economic development and international trade.

**Category**
Economic development, International trade