International Journal of Social Sciences and Humanities Reviews Vol.10 No.3, September 2020; p. 261 – 273 (ISSN: 2276-8645) 261 CAPITAL FLIGHT, CORRUPTION AND UNEMPLOYMENT RATE IN NIGERIA: AN ANALYTICAL REVIEW OF ECONOMIC PERFORMANCE MIFTAHU IDRIS Department of Economics, Taraba State University Jalingo, Nigeria. Email: miftahu4real12@gmail.com Abstract This study evaluates the role of capital flight in impelling corruption and unemployment rate in Nigeria. By recognising corruption and unemployment rate as outcome of poor governance and weak institutions, the analytical review explores the undeviating connections between the variables. The study is unique in the sense that it employs a descriptive approach which explicitly identifies capital flight as a contributory factor to the growth of corruption and unemployment rate. Given the weak institutional framework and high political uncertainties, capital flight in Nigeria encourages corrupt practices and further create more vacuum of unemployment due to retarded investment. Therefore, advocating for efficient administration with sound policy framework by opposing capital flight and other related illicit capital transfers will lower the tempo of corruption and unemployment in Nigeria. Keywords: Capital flight, Corruption, Unemployment, Economic growth, Nigeria. Introduction Over the years, the outflow of illicit funds from developing countries has dramatically increased especially among the Sub-Saharan African region. The performance of the region has been characterised by economic stagnation mainly due to depletion of resources. This poor economic performance has caused the region to incessantly experienced balance of payment disequilibrium, high political uncertainties, deteriorating government finances, and increasing rate of poverty. Nevertheless, if the illicit funds had been re-invested in the African continent coupled with the productivity growth of present investment stocks, the rate of unemployment and corrupt practices will drastically reduce to a barest minimum. The nefariousness of such a colossal capital outflow provides another reason why various attempts by donor agencies to encourage sustainable economic development have been thwarted in Africa. Historically, the development of capital flight can trace dated back to the 17 th century in France when the capital outflow to London transpired mainly in the form of wine, coin, bill of exchange and jewelleries from catholic bankers (Wujung & Mbella, 2016). France also witnessed another capital outflow by the Noble Emigres after the French revolution of 1789 to 1793. Between 1961 and 1963, Italy also experienced substantial transfer of illicit funds that were being smuggled to Switzerland. In addition, Feiler (1934) alerted that the increased capital outflows from debtor to creditor nations has expanded the 1930’s Great Depression causing an unexpected standstill in international borrowing and weakening a strong relation in the global transactions. Furthermore, Haberler (1976) also added that international transactions particularly the movement of illicit funds dominated the German depression. In France, the election of a Socialist President in 1981 has prompted a significant capital expatriation. Also, in the emerging markets, Argentina, Brazil and Russia are notorious examples of private capital outflows resulting from overvalued exchange rates and socio-political tensions. However, illicit fund transfer is regarded as an indicator of poor governance, inefficient economic policies and fragile institutional framework which provide the basis for sustainable growth. As a result, the growth momentum and drive for development is stunted. Since the ugly situation involves movement of capital to foreign nations, demand for foreign currency will increase which further applies pressure on certain macroeconomic variables like exchange rate and inflation. Only in Africa, corrupt practices and the transfer of illicit funds have contributed extensively to capital flight, with an estimated $400 billion being looted and stashed in foreign banks (United Nations, 2002). The magnitude of the problem is so large that it has led to