THE EFFECT OF CAPITAL FLIGHT AND FOREIGN DIRECT INVESTMENT ON NIGERIAN ECONOMY

Fineboy Ikechi Joseph 1 and Jane Chinyere Akujor 2 ,
Department of Accounting, Faculty of Social and Management Sciences, Clifford
University, Owerrinta, Ihie, Abia State. E-mail: fayooxyz2009@yahoo.com
,emeaukalu@yahoo.com
2 Department of Financial Management Technology, School of Management
Technology , Federal University of Technology, Owerri, Imo State. E-mail:
janeakujor@gmail.com

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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