International Journal of Business and Risk Management
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International Journal of Business and Risk Management. 2021, 4(1), 19-24
DOI: 10.12691/ijbrm-4-1-3
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The Effect of Capital Flight on Economic Growth in Nigeria

Ehijiele Ekienabor1, , Arilesere Mustapha Sina2 and Ogungbenle Simeon Kayode3

1Business Administration Department, Igbinedion University, Okada, Edo State, Nigeria

2Business Administration Department, Federal University, Oye, Ekiti State - Nigeria

3Finance Department, Igbinedion University, Okada, Edo State - Nigeria

Pub. Date: September 25, 2021

Cite this paper:
Ehijiele Ekienabor, Arilesere Mustapha Sina and Ogungbenle Simeon Kayode. The Effect of Capital Flight on Economic Growth in Nigeria. International Journal of Business and Risk Management. 2021; 4(1):19-24. doi: 10.12691/ijbrm-4-1-3


The rise in external debt and the substantial movement of massive funds out of the country from politicians, corporate bodies, and foreign investors have been a course of worry among Nigerians in the face of economic hardship. This study examined the effect of capital flight on economic growth in Nigeria. Hypotheses were developed and tested using secondary data from 1981 to 2019 from the Central Bank of Nigeria Statistical Bulletin. Data were analysed using the ordinary least square technique. Using the rule of thumb estimation, the result reveals a negative and significant relationship between capital flight and economic growth in Nigeria. This implies that increases in capital flight will have a significant negative effect on economic growth. Additionally, the study shows a significant negative relationship between external debt and economic growth in Nigeria. This implies that increases in external debt will have a significant negative effect on economic growth. The study recommended that the government and policymakers slow down its debt borrowings because of the rising interest rate on these debts and exchange rate differentials. Reserves are essential for macroeconomic stability and hence should be encouraged. Furthermore, an enabling environment must always be provided in Nigeria to attract more foreign investment to stimulate its economic growth further.

capital flight external debt economic growth RGDP foreign investment

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