Capital Flight and Economic Growth in Nigeria

Abstract

This study investigated the effect of capital flight on economic growth in Nigeria within the periods 1990 to 2017. Time series data covering these periods of study were employed and the data analysis were conducted for both the short run and the long run using the co-integration analysis while the ADF tests was used in testing for stationarity of the time series. The researchers made use of the ordinary least square (OLS) econometrics method of data analysis. The T-test results revealed the existence of a strong relationship between the proxies of capital flight and gross domestic product serving as proxy for economic growth. Recommendations proffered include the following amongst others: Policy-makers and the relevant authorities  should pay more attention than ever to the issue of capital flight and external debt servicing in order to stem its counter-productive effects on economic growth; Since the external debt servicing (EDS), which is a major leakage in the economy, has a negative relationship with the real gross domestic product (RGDP), the government and the monetary authorities should do well to have a firm grip on the type and form of debt borrowed.

Keywords: capital flight; economic growth; net foreign investment; external debt servicing; external reserves; gross domestic product

Article Review Status: Published

Pages: 47-76 (Download PDF)

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