Impact of Capital Flight on Economic Growth in Nigeria: An Econometric Approach

摘要

This article examined the impact of capital flight on economic growth in Nigeria. Classical methods of predicting impact of capital flight on economic growth have not yielded much result. This research examines time series data which includes gross domestic product (GDP), capital flight, exchange rate and external debt which was computed from the national Bureau of Statistics and central Bank of Nigeria Statistical Bulletin. The model estimated to cover the period 1980 - 2012 was analyzed using combined global technique, Artificial Neural Network (ANN) as a predictive technique and classical techniques like Ordinary Least Square (OLS) and co-integration/error correction methods. The variable in the model was estimated for possible co-integration. Research finding showed that capital flight have adverse impact on the GDP, while exchange rate impacts positively on the GDP which is in consonance with apriori expectation. Based on the findings, recommendations were made on how to check the menace of capital flight in Nigeria. Among such recommendation is the need for the government to setup appropriate institutions to check the volume of capital that is been flown out of the country, there should be restrictions on external borrowing tendencies on all levels of governments and agencies as well as private sector organizations; government should maintain a competitive and stable exchange rate policy.