The Effect of Capital Flight and Foreign Direct Investment on Nigerian Economy

Author(s)

Joseph, Fineboy Ikechi , Akujor, Jane Chinyere , Nwankwo, Kelechi Odii ,

Download Full PDF Pages: 18-31 | Views: 29 | Downloads: 11 | DOI: 10.5281/zenodo.12801091

Volume 13 - June 2024 (06)

Abstract

The study examines the effect of capital flight and foreign direct investment on Nigerian economy for the period of 2008-2019. The data were analysed using Multiple Regression in line with the research objectives. The findings reveal that capital flight does have significant effect on economic growth in Nigeria. It is equally revealed that foreign direct investment does have a significant effect on economic growth in Nigeria; a confirmation that foreign direct investment in Nigeria has reduced drastically as a result of political instability, lack of transparency, widespread corruption and poor quality of infrastructure. Based on the findings, it was concluded that increase in capital flight and reduction in foreign direct investment in Nigeria would continue to impact the economy negatively. The study therefore recommended that the government, politicians and the policy makers should formulate policies to attract foreign investors rather than illicitly and extravagantly sending or spending money overseas. Policies that would encourage reception of new technology and more job opportunities and increased productivity into the economy should be encouraged. It is also recommended that the domestic investors should be considered while formulating policies that could attract and motivate existing and potential domestic investors in Nigeria and also reduce illicit flow of funds abroad as this in turn will enhance the GDP of the nation.

Keywords

Foreign Direct Investment, Capital Flight, Gross Domestic Product, Multinational Corporations

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