EFFECT OF CAPITAL FLIGHT AND ITS DETERMINANTS ON AGRICULTURAL GROWTH IN NIGERIA

ABSTRACT Capital flight forms a serious macroeconomic issue that has continued to attract the growing concern of Nigerian stakeholders. The effect has significant negative impacts on the dynamics of investment and has a direct negative correlation with the overall growth in the economy. This study, therefore, focuses on the factors of capital flight and the effects of the same on agricultural development in Nigeria. The secondary information was the Statistical Bulletin of the Central Bank of Nigeria covering the year 1994 to 2024. Descriptive and inferential statistical methods were integrated in the empirical approach, which involved the use of E- View 9. The regression model using the Autoregressive Distributed Lag (ARDL) was used, and the results indicated that capital flight has a negative impact on the growth of agriculture with a coefficient of -2.67; external debt burden has a negative impact with coefficient of - 2.14; interest rates have a coefficient of -0.58 and exchange rates have a coefficient of -0.02. Each of these coefficients is statistically significant at traditional 1per cent or 5 per cent confidence levels. These results thus testify to the fact that the combination of capital outflow, the presence of the external debt, the inflationary pressures, and the exchange rate instability is the key to the chronic underdevelopment of the further development of agricultural sector in Nigeria. Considering these findings, the Federal Government should consider developing and establishing image-enhancement projects that would uplift the business and economy environment in the country, which would in turn bring more FDI inflows to the agricultural sector.