EFFECT OF CAPITAL FLIGHT ON FOREIGN INVESTMENT IN NIGERIA

Abstract: The objective of this study is to evaluate the effect of capital flight on foreign investment in Nigeria. The study obtained financial data from Central Bank of Nigeria Statistical Bulletin. The study made use of exploratory survey tools. Secondary data was used for data collection. The empirical method which adopts regression analysis was used to test the stated hypotheses. The findings revealed that the relationship between capital flight and investment is insignificantly negative. High exchange rates do not significantly increase capital flights out of the economy nor reduce Foreign Investment. This shows that Nigerian investment process is not significantly benefiting the RGDP or there is insufficient investment to significantly affect the RGDP. The work recommends that Capital flight management and reactions to capital account restrictions be factored into the management of external reserves position of developing countries. Removal of the exchange rate misalignment and the premium will be a good start to reduce flights of capital out of the economy. The monetary authorities should begin to look seriously into how to reduce the unresolved statistical discrepancies that are posted into the Balance of Payments with a view to finding out what make up such figures and how they came about.

Keywords: capital flight, Exchange rate, external reserve, inflation, investment, premium.

Title: EFFECT OF CAPITAL FLIGHT ON FOREIGN INVESTMENT IN NIGERIA

Author: Ezu, Gideon Kasie, Oranefo, Patricia Ijeoma

International Journal of Novel Research in Marketing Management and Economics

ISSN 2394-7322

Vol. 10, Issue 1, January 2023 - April 2023

Page No: 43-52

Novelty Journals

Website: www.noveltyjournals.com

Published Date: 07-March-2023

DOI: https://doi.org/10.5281/zenodo.7704149

Paper Download Link (Source)

https://www.noveltyjournals.com/upload/paper/EFFECT%20OF%20CAPITAL%20FLIGHT-07032023-1.pdf