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Effect of Capital Flight on Sustainable Economic Development in Nigeria

Effect of Capital Flight on Sustainable Economic Development in Nigeria


The study examines the effect of capital flight on sustainable economic development in Nigeria. The study adopted the ex-post-facto research design. Data for the study were sourced from the Nigerian Bureau of Statistics (NBS) report World Development Indicators (WDI), and the Central Bank of Nigeria (CBN) Statistical Bulletin. The data generated were analysed using the econometric analytical method. The hypotheses were tested using the Johansen cointegration test relying on Trace statistics in determining the existence or otherwise of a long-run equilibrium relationship. The results show that foreign direct investment outflow had significant impacts on per capita income and real gross domestic product in Nigeria while it had insignificant impacts on federal government expenditure on education and federal government budgetary allocation for health services. Based on this, the study recommends that government should improve the business environment in Nigeria as a way of curbing FDI outflows. In this way, she would enhance the nation’s standard of living (per capita income) and productivity (real GDP).

Keywords: Capital Flight; Sustainable Economic Development; Foreign Direct Investment

Prof. Okafor, Toochukwu Gloria1; Odum, Augustine Nwekemezie PhD2; and Ihezue, Stella Azuka3