Capital flight, unemployment and economic growth in Nigeria (1980-2013)
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Date
2016
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Economics,Obafemi Awolowo University
Abstract
The study analyses the trend of capital outflow, unemployment and economic growth in Nigeria; and investigated the impact of capital flight on unemployment in Nigeria. It also analyses the relationship between capital flight and economic growth in Nigeria. These were with the view to determining the relationship among capital flight, unemployment and economic growth in Nigeria for the period 1980 to 2013.
Secondary data were used for the study. Annual data on gross domestic product, capital flight, unemployment, exchange rate and interest rate covering the period from 1980 to 2013 were sourced from the World Development Indicators (WDI) of World Bank. Data collected were analysed using descriptive statistics such as charts, tables and graphs; and econometrics techniques of vector auto-regression (VAR) and autoregressive distributed lag (ARDL) model.
The result shows that capital flight represented by outflows which shows a higher figure of N8 billion, N9 billion, N10 billion and N13 billion in 1998, 1990, 1993 and 2000 respectively, while there was drops in capital outflow in 2003, 2004, 2005, 2006 and 2007 which stood at N4.7 billion, N1.6 billion, N2 billion, N2.6 billion and N3.3 billion respectively. Similarly, from the trend of unemployment rate, it was revealed that unemployment rate increases as the population increases. The appraisal of economic growth shows that economic growth proxy by gross domestic product in Nigeria has witnessed an upward growth since 1980. In 1986, output growth recorded the least value of 1.8% due to SAP, output grew to 49% and 54 % in 1987 and 1989 respectively immediately after SAP. The estimates reveals that capital flight had a significant and positive effect on unemployment (t = 2.6, p < 0.05). Similarly, exchange rate had a positive and significant effect on unemployment (t = 3.35, p < 0.05). On the other hand, the study found that capital flight had a negative and significant effect on economic growth (t = -6.7, p < 0.05). Furthermore, unemployment had a negative effect on economic growth in Nigeria (t = -4.9, p < 0.05). Also, exchange had a negative and significant effect on economic growth in Nigeria (t = -3.3, p < 0.05).
The study concluded that capital flight and unemployment reduces economic growth in Nigeria.
Description
xiv,87p
Keywords
Unemployment, Capital flight, Economic growth, Neoclassical growth theory
Citation
Toluju.S.O(2016). Capital flight, unemployment and economic growth in Nigeria (1980-2013).Obafemi Awolowo University