Effects Of Capital Flight On Exchange Rate In Nigeria: 1986-2015
The study presented a critical examination of the effects of capital flight on exchange rate in the Nigerian economy over a period of 30 years (1986-2015). An Ordinary Least Square (OLS), Augmented Dickey-Fuller unit root test and Co-integration tests were adopted to carry out an extensive analysis of such variables as Gross Domestic Product, Capital Flight and Exchange Rate. The results revealed that the variables have a significant effect in the positive direction with a coefficient of 0.007421 and probability value at 0.05. This implies that capital flight encourages increasing demand for foreign currency which tends to exert pressure on exchange rate at 0.74 percent, thereby increasing the rate, among other factors. Based on the empirical findings, the study recommended that decayed infrastructure and utilities should be rehabilitated; monetary authorities should seriously regulate the activities of premium currency marketers; and foreign firms should be encouraged to make use of local skills and raw materials available in the domestic economy, rather than importing them. This will save foreign exchange, improve technical skills of Nigerian citizens, reduce unemployment and limit the flight of capital from the economy.
Authors who publish with this journal agree to the following terms: RAIS Journal of Social Sciences is given by the author the right of the first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal. Authors retain copyright. If the author cites from his own article published in RAIS Journal of Social Sciences, then he is encouraged to cite the name of the RAIS Journal of Social Sciences, volume, and page. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access). This journal provides immediate open access to its content, in this way, we make research freely available to the public and support a greater global exchange of knowledge.
The names and email addresses entered in this journal site will be used exclusively for the stated purposes of this journal and will not be made available for any other purpose or to any other party.