Economic Consequences of Capital Flight in Nigeria: Evidence from an Economic Linkages Framework

Capital flight remains a pervasive constraint on economic development in Nigeria, yet the dominant literature has concentrated on its determinants and magnitude rather than its internal structural consequences. This paper examines the developmental consequences of capital flight through an Economic Linkages Framework, an original conceptual architecture that synthesises Hirschman’s (1958) backward and forward linkage theory, Keynesian multiplier analysis, and endogenous growth theory to explain how capital flight disrupts the processes through which domestic investment generates compounding economic value. The framework distinguishes two structural pathways: positive economic linkages when capital is retained, and negative economic linkages when capital exits, producing weakened aggregate demand and structural fragmentation.