International Journal of Development and Economic Sustainability (IJDES)

EA Journals

Capital Flight

Capital flight Effects on Government Income and Budget Balance in Nigeria (2019-2030): A Dynamic SCGE Modelling Approach (Published)

This research analyse the dynamic effects of capital flight on government income and budget balance in Nigeria. The study used a dynamic structuralist computable general equilibrium (SCGE) model to run simulations that indicate the nature of capital flight effect on Nigerian government income and budget balance over the period 2019–2030. The findings show that a successive increase in capital flight in Nigeria will exerts a negative effect on government income and positive effect on government budget balance in the immediate, short, medium and very long term. This study concluded that the government income is vulnerable to capital flight and is affected by successive outflow of legal or illegal capital. On the basis of the findings, this study recommends the following strategies to curb capital flight from Nigeria, these include, plugging the holes through which money leaks, transparency and quality of bilateral trade data, checking the role of multinational corporations in trade misinvoicing, CBN should introduce selective, targeted, and time-bound capital controls to stem outflows, especially outflows through banking channels. Government should thus depend more on domestic borrowing as a means of supplementing its resources. Government and policymakers must establishment of well-functioning political and judicial institutions that will ensure political stability within a country and overly expansionary monetary and fiscal policies, an incompatible exchange-rate policy, and a repressive set of financial policies should be designed to divert resources toward the public.

Keywords: Capital Flight, Nigeria, SCGE, government income and budget balance

Foreign Direct Investment, Portfolio Flows and Economic Growth in Nigeria (Published)

This research focuses on the impact of Foreign Direct Investment and Portfolio Flows on Economic growth in Nigeria.  The research covers the period between 1980 and 2018.   Secondary data were collected from the Central Bank of Nigeria statistical bulletin and various issues of World Bank Publications as well as Nigerian Bureau of Statistics (NBS) The period being understudied encompasses the period of massive government efforts to attract foreign investors into the country as well as period of turbulent macroeconomic indicators such as high unemployment and low level of per capita income in Nigeria.  The parsimonious Error Correction Modelling (ECM) result shows that Foreign Direct Investment, Foreign Portfolio Investment, Labour force and Gross Fixed Capital Formation have a positive and significant impact on the level of Economic Growth in Nigeria.  The Johanson cointegration test result shows a long-run relationship among Foreign Direct Investment, Foreign Portfolio Investment, Labour Force, Gross Fixed Capital Formation in Nigeria.  The result from the variance decomposition reveals that shocks to Foreign Direct Investment, Foreign Portfolio Investment, and Labour Force and Gross Fixed Capital formation did not explain a significant proportion of the changes in economic growth in Nigeria within the period of the study.  It was recommended that government should put in place policies to encourage foreign investors to go into the agricultural and manufacturing sectors which are key to job creation and for sustainable economic growth.

Keywords: Capital Flight, co-integrating relationship, economic growth, non-stationary variables, parsimonious model.

Capital Flight and the Nigerian Economy (1986-2016) (Published)

This study examined the impact of capital flight on the Nigerian economy from 1986-2016 Real Gross Domestic Product and Capital Flight were used as the endogenous variables while Political instability, Amount of Looted funds, Interest Rate Differentials, Expenses on Foreign Medical Services and Education Abroad and Domestic Investment were the explanatory variables. Data for these variables were sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin, World Bank Development Index, Economic and Financial Crimes Commission Bulletins, Tertiary Education Trust Fund Publications and the Federal Ministry of Information Annual Briefings and Extracts (various editions). The variables were found to be integrated of mixed order hence we confirmed the long run relationship existing among the variables using the Bounds test. The simultaneous equation model shows a negative and significant relationship between capital flight and economic growth. Domestic Investment and Interest Rate Differential both have positive relationships with Real GDP while Political Instability, looted Funds, Expenses on Foreign Education and Medical Services were found to have positive and significant impact on Capital Flight. The implication of these findings is that Capital flight have negatively impacted on Economic growth of Nigeria with Foreign Education and Medical Expenses and Looted Funds being the major channels through which huge capital leave the country. It was recommended that our education and health infrastructures should be adequately funded and maintained. Also, the government should ensure good governance and prosecution of corrupt officials in order to discourage capital and encourage domestic investments.

Keywords: Capital Flight, Interest Rate Differentials, Looted Funds, economic growth

The Effect of Nigerian Elites Overseas Medical Treatment on Nigerian Economy (Published)

The main objective of this study is examines the effect of Nigerian elite’ overseas medical treatment on the economy of Nigeria. Both quantitative and qualitative data collected through informal interview and structured questionnaire administered to a sample of 102 Nigerian elites across the thirty six states of Nigeria. The data were analyzes using, mean average and multiple regression analysis. The result shows that Nigerian elite’ overseas medical treatment has negative and statistically significant effects on the Nigerian economy. More so, Nigerian elite’ overseas medical treatment have effect on the capital flight and unemployment. Based on this findings it is therefore recommended that Nigeria governments and stakeholders in health sector at all level should formulate appropriate policy that will discourage Nigerian elite overseas medical treatment by provide necessary world class medical infrastructures with best medical team that are well qualify to managed this medical institution. Furthermore, provision of quality of healthcare delivery in the country; restore the confidence of Nigerian elites in the health sector, and, more importantly, create the enabling environment for the nation’s brains in the Diaspora to return home and boost our medical tourism.

Keywords: Capital Flight, Elites Overseas Medical Treatment, Unemployment

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