CAUSES AND CONSEQUENCES OF CAPITAL FLIGHT FROM NIGERIA: IMPLICATIONS FOR SUSTAINABLE DEVELOPMENT (2015–2025)
Aliyu Adavuruku John, PhD and Ibrahim Shaba Yahaya
Volume 12 Issue 3
Abstract
Capital flight constitutes a significant barrier to sustainable development in developing economies by diverting limited domestic savings from productive investment. This study investigates the causes and consequences of capital flight and assesses its implications for sustainable development in Nigeria during the period 2015–2025. Using a quantitative correlational research approach, the analysis draws on time-series data from the Central Bank of Nigeria, the World Bank, and the United Nations Conference on Trade and Development, employing descriptive statistics, Pearson's correlation, and multiple regression techniques. Maurice Obstfeld’s research is particularly relevant to this study, as he emphasises the complexity of interpreting international capital mobility while also providing evidence that capital mobility has become high and is increasing globally. This broader global trend underscores the need to understand how capital flows affect developing countries like Nigeria, and situates the analysis of Nigerian capital flight within a worldwide context of rising financial integration. The study concludes that capital flight systematically deprives the Nigerian economy of essential financial resources required for investment and social capital formation. It recommends strengthening monetary and fiscal policies, intensifying anti-corruption initiatives with asset recovery mechanisms, diversifying the economic base, and implementing digital capital account management measures. Keywords: Capital Flight, Sustainable Development, Illicit Financial Flows, Exchange Rate Depreciation, Corruption
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