Analysis of the Effects of Capital Flight on Economic Growth: Evidence from Nigerian Economy (1980 – 2011)

Akani Waleru Henry


Sequel to the severity of the effects of capital flight on an economy and in an attempt to limit capital flight from the Niger Delta region of Nigeria and considering the monoculture nature of the economy in 2008, an amnesty programme between the Federal Government of Nigeria and the Niger Delta Militant was signed in 2009. This has come and gone yet capital flight prevails. This study therefore, made attempt to investigate into the determinant, measurement and impact of capital flight on the economic growth in Nigeria using ordinary least square technique, multiple regression and descriptive statistics. Time series data from 1980 to 2011 were also employed. The quantitative results reveal that, large capital outflows from the Nigerian Niger Delta Region is accounted for by political instability, high fiscal deficits, high interest rate and high profile external debt servicing GDP ratio, therefore, economic growth and development in Nigeria can be achieved and sustained through alleviation of capital flight. We recommend for good governance, full implementation of fiscal discipline, attitudinal change in the management of National economy and enactment of law-protecting Nigerian involved in capital flight before now to enable them repatriate their stolen money back home and investment them in the real sector of the economy.

Keyword: Capital flight, Economic growth, attitudinal change

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ISSN (Paper)2222-1905 ISSN (Online)2222-2839

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