Published in Scientific Papers. Series "Management, Economic Engineering in Agriculture and rural development", Vol. 16 ISSUE 3
Written by Kingsley Onyekachi ONYELE, Eberechi Bernadine NWOKOCHA

The study investigated the relationship between capital flight and poverty in Nigeria. The time series data spanning from 1986 to 2014 was analyzed using Johansen co-integration test and error correction model. The Johansen co-integration results revealed that a long run equilibrium relationship exist between capital flight and poverty (proxied by discomfort index) in Nigeria. Similarly, the error correction term showed that the present value of discomfort index (a proxy for poverty) adjusted rapidly to changes in capital flight, real exchange rate, real gross domestic product growth rate and adult literacy rate by approximately 66.82 percent in the long run. On the other hand, capital flight had a positive relationship with discomfort index (a proxy for poverty). Similarly, real gross domestic product (GDP) growth rate and adult literacy rate related positively with discomfort index. Among other things, it was recommended inter alia that government should lift the stringent penalties due to money launderers in order to encourage repatriation of their investments, coupled with strict policies aimed at preventing and checking further siphoning of national wealth.

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