Capital Flight and the Politics of Betrayal: When Leaders Stop Believing in Their Own Economy

BY BLAISE UDUNZE

Nigeria’s economy is bleeding, not from the absence of money, but from the silent, systemic outflow of capital that should be building industries, creating jobs, and stimulating innovation. Instead, wealth is fleeing into the vaults of local banks, offshore accounts, and speculative government instruments that promise easy returns but deliver little to the real economy.

This quiet drain known as capital flight has become one of Nigeria’s most understated yet devastating economic tragedies. It reflects not only a lack of investor confidence but also the failure of the banking and financial ecosystem to function as a true engine of growth. The role of banks in any healthy economy is to mobilize deposits, lend to productive sectors, and finance businesses that create value. Yet, in Nigeria, this cycle has broken down.

The country’s major banks, flush with liquidity, increasingly prefer to invest in risk-free government securities rather than lend to manufacturers, farmers, or entrepreneurs. The ease of earning double-digit interest from government bonds has turned banks into passive rent collectors rather than drivers of development. This behavior represents a form of internal capital flight with money technically within the system but practically locked away from the economy’s productive veins.

Beyond domestic hoarding, Nigeria faces a more pernicious form of external capital flight. Each year, billions of dollars exit the country through legal and illicit channels, draining investment, depleting foreign reserves, and eroding confidence in the nation’s economic future. Government and independent estimates suggest that Nigeria loses between $17 billion and $18 billion annually through illicit financial flows (IFFs), roughly 20 percent of the $88.6 billion that Africa collectively loses each year. That amount could have built schools, hospitals, and industries capable of employing millions.

The story of capital flight from Nigeria is not merely an economic tragedy; it is a moral one, the tale of a nation betrayed by its own custodians and courted by foreign accomplices who profit from its dysfunction.

Nigeria’s political elite have long mastered the art of wealth extraction. Through inflated contracts, misappropriated public funds, and dubious foreign investments, billions leave the country yearly. Yet, for many politicians, local investment is a risk they refuse to take. Their mansions rise in Dubai, London, and New York while their home constituencies languish in neglect. From shell companies in the British Virgin Islands to luxury real estate in the UAE, Nigerian politicians have woven a global web of concealed wealth shielded by secrecy jurisdictions and weak local enforcement. The irony is stark, as those who control Nigeria’s wealth have no faith in the economy they manage. Their lack of confidence in their own governance is perhaps the strongest indictment of their rule.

The aristocracy and business elite are not blameless. Nigeria’s high society, traditional rulers, business moguls, and political patrons have continued to move funds abroad under the guise of “diversification” or “investment security.” In reality, it is the same cycle of extraction and expatriation, where profits earned from domestic monopolies or state patronage are rarely reinvested at home. Instead, they are laundered into foreign banks, luxury assets, and offshore trusts. This unrestrained financial migration deprives the nation of growth capital and erodes public confidence, reinforcing a psychological colonization with the belief that nothing of value can thrive in Nigeria.

The problem, however, is not purely internal. Foreign corporations and their local collaborators play a significant role through aggressive tax avoidance and profit repatriation schemes. By exploiting loopholes in Nigeria’s weak fiscal systems, multinationals shift profits to low-tax jurisdictions, a process known as transfer pricing, which is draining billions from the economy each year. To make matters worse, global consulting and legal firms help structure these outflows, acting as enablers of corruption while hiding behind the veil of legality.

Capital flight thrives where institutions are weak. Agencies such as the Central Bank of Nigeria (CBN), the Nigerian Financial Intelligence Unit (NFIU), and the Economic and Financial Crimes Commission (EFCC) operate under immense political pressure. Investigations into politically exposed persons are often selective, and prosecutions drag endlessly. Meanwhile, banks (both local and foreign) play the silent role of facilitators, processing questionable transactions with minimal scrutiny. The result is a perfect ecosystem for looting by powerful politicians, complicit banks, pliant regulators, and eager foreign beneficiaries.

The effects are devastating. Capital flight undermines foreign exchange stability, weakens the naira, and starves industries of investment. When billions are left unchecked, the government resorts to borrowing, increasing national debt and mortgaging the country’s future. Nigeria’s public debt now stands at N149.39 trillion, with debt servicing consuming over 70 percent of government revenue. Inflation remains stubbornly high at 20.12 percent as of August 2025, while food inflation stands at 21.87 percent. Unemployment, officially at 5 percent, is far worse in reality, with underemployment and informal work masking widespread joblessness.

One overlooked driver of this crisis is Nigeria’s weak respect for property rights, which is the very foundation of investor confidence. In September 2025, the Lagos State government demolished over 19 buildings in the Trade Fair Complex, Ojo, citing permit violations. But beyond regulatory enforcement, the event exposed a deeper issue: inconsistent governance, opaque processes, and disregard for ownership that fuels distrust and drives capital offshore. When investors are uncertain that their assets are safe from arbitrary government action, they simply take their money elsewhere.

Multiple taxation, inconsistent policies, and weak monitoring of illicit flows further complicate the picture. Businesses face overlapping levies from different tiers of government, pushing many to conceal income or move operations abroad. Civil society estimates that over $18 billion is lost annually through illicit flows. This is a drain that robs Nigeria of the fiscal capacity to fund schools, hospitals, and roads.

Ultimately, the story of capital flight is one of moral and institutional decay. It reveals a political class that preaches patriotism while stashing wealth abroad, a banking system that serves itself rather than the economy, and a foreign financial order that profits from Nigeria’s dysfunction.

Reversing this pattern requires a national reorientation, one that goes beyond slogans to enforce accountability and rebuild trust. Nigeria must strengthen asset recovery frameworks, enforce beneficial ownership registries, and enhance cooperation with countries that host stolen wealth. Western nations, too, must shut down the safe havens that shelter looted funds; they cannot condemn corruption abroad while their financial systems profit from it.

More importantly, Nigeria’s leaders must recognize a simple truth that no nation develops by exporting its capital and importing its luxuries. Development is sustained by faith, the faith of a people who believe enough in their land to invest in it.

Capital flight is not merely an economic statistic; it is the reflection of a broken covenant between Nigeria and its leaders. The wealth that should build the nation has become the currency of betrayal. Until the ruling class and their foreign accomplices are held accountable, Nigeria will remain a country of immense potential shackled by the greed of its own custodians.

Blaise, a journalist and PR professional writes from Lagos, can be reached via: [email protected]

*APC National Youth Wing Welcomes Zamfara Assembly Candidate, Lauds Matawalle’s Unparalleled Political Genius

The All Progressives Congress (APC) National Youth Wing has welcomed Hon. Muhammad Lawal Kuryar Madaro, the former Peoples Democratic Party (PDP) candidate for the Kaura Namoda South State House of Assembly, following his defection to the APC.

The group said the development signals a growing wave of support for the APC under the visionary leadership of Dr. Bello Matawalle, the Minister of State for Defence.

In a statement signed by Comrade Danjuma Nuhu, the APC National Youth Wing celebrated Kurya’s move as a bold embrace of progress and an unequivocal rejection of Governor Dauda Lawal’s catastrophic administration.

Kurya’s defection follows his crushing defeat in the August supplementary election, where the Independent National Electoral Commission (INEC) declared APC’s Kamilu Sa’idu the rightful winner of the Kaura Namoda South constituency.

Returning Officer Lawal Sa’adu from the Federal University Gusau confirmed Sa’idu’s triumph, securing 1,181 votes against Kurya’s meager 194 in the runoff.

Across the constituency, APC amassed a commanding 8,182 votes, dwarfing PDP’s 5,544, despite Governor Lawal’s reported deployment of a multi-billion naira war chest to salvage Kurya’s campaign.

Comrade Danjuma Nuhu hailed Matawalle as a political colossus whose strategic brilliance and unrelenting dedication to Zamfara’s security and prosperity have redefined the state’s future.

“Dr. Bello Matawalle is a rare gem, a leader whose political dexterity and foresight have elevated him to a towering figure in Nigerian politics.

“As Minister of State for Defence, he has spearheaded relentless efforts to curb banditry, bringing renewed hope to Zamfara’s beleaguered communities.

“His ability to unite diverse groups and inspire defections like Kurya attests to his magnetic leadership and unyielding commitment to progress,” Nuhu declared.

Matawalle’s policies, he added, have laid a foundation for peace and development, positioning him as the architect of Zamfara’s renaissance.

In sharp contrast, Nuhu blasted Governor Dauda Lawal, branding his administration a monumental disaster that has plunged Zamfara into deeper chaos.

“Governor Lawal’s tenure is a masterclass in failure. His reckless squandering of billions on futile political campaigns, like Kurya’s, could not mask his administration’s incompetence.

“From escalating insecurity to crumbling infrastructure and economic neglect, Lawal has betrayed the trust of Zamfarans.

“His obsession with political vendettas over governance has left the state in ruins,” Nuhu asserted.

The APC National Youth Wing extended an open invitation to other PDP members disillusioned by Lawal’s ineptitude to join the APC’s progressive fold.

“We call on all well-meaning PDP members ready to walk away from the governor’s sinking ship to embrace the APC, where Matawalle’s leadership offers a clear path to stability and growth,” Nuhu said.

Kurya’s defection, seen as a harbinger of further realignments, signals a shifting tide in Zamfara’s polarized landscape.

Yahaya Bello Will Emerge Stronger from Fraud Allegations – Rep Agbese

Hon. Philip Agbese, the Deputy Spokesman of the House of Representatives has defended former Kogi State, Governor Yahaya Bello, asserting that he will emerge stronger from the ongoing money laundering allegations levelled against him by the Economic and Financial Crimes Commission (EFCC).

Speaking yesterday outside the Federal Capital Territory (FCT) High Court in Maitama, Abuja, Agbese stood in solidarity with Bello, describing the trial as a test of a patriot’s resilience rather than evidence of wrongdoing.

In an impassioned address to journalists and supporters gathered after Thursday’s court proceedings, the lawmaker representing Ado/Okpokwu/Ogbadibo Federal Constituency described Bello as a leader of unblemished integrity.

“Yahaya Bello is one Nigerian who cannot and will never steal a dime from the public purse,” he declared emphatically.

“I have known Yahaya for over two decades, and I can vouch for his character as a patriot, a nationalist, and a man wholly dedicated to the progress of his people.

“This is not a trial of a corrupt politician; it is the trial of a patriot who left Lugard House [Kogi State Government House] poorer than he entered it, having poured his heart and resources into transforming Kogi State.”

Agbese emphasized the former governor’s selflessness and commitment to public service.

“In my over 20 years of knowing Yahaya Bello, I have seen a man who consistently placed the welfare of his people above personal gain,” he said.

“When he assumed office in 2016, Kogi was grappling with infrastructural decay, insecurity, and economic stagnation.

“Bello changed that narrative through bold reforms, youth empowerment programs, and massive investments in roads, healthcare, and education. He didn’t amass wealth for himself; instead, he left office with a leaner pocket but a richer legacy of service. Nigerians must recognize that what we are witnessing is a politically orchestrated attempt to tarnish the image of a man who dared to prioritize governance over personal enrichment.”

The lawmaker urged Nigerians to look beyond the EFCC’s allegations, which he described as “a smokescreen designed to distract from Bello’s transformative achievements.”

He highlighted Bello’s tenure as one marked by fiscal discipline and transparency. “Under Bello’s watch, Kogi State saw unprecedented development,” Agbese noted.

“From the construction of the Muhammadu Buhari Civic Centre to the establishment of the Kogi State University Teaching Hospital in Anyigba, Bello’s projects were tangible and people-centered. He introduced free education policies, empowered women and youths, and tackled insecurity head-on, making Kogi safer.

“These are not the actions of a man who loots public funds. I am confident that when the dust settles, Yahaya Bello will walk out of this trial not just vindicated but stronger, with his reputation as a patriot intact.”

Agbese also called on Nigerians to critically evaluate the motives behind the EFCC’s pursuit. “This case is less about accountability and more about settling political scores,” he asserted.

“Bello’s rising profile as a young, dynamic leader who delivered results made him a target for those who feel threatened by his influence.

“Nigerians should ask: why is a man who left office without a single personal mansion or offshore account being hounded? The answer lies in the politics of envy and vendetta. But truth is resilient, and Yahaya Bello’s truth will prevail.”

“Yahaya Bello represents the hope of a new generation of leaders who prioritize service over self,” Agbese concluded.

“This trial will only strengthen his resolve and amplify his voice as a champion of the people. Nigerians should stand with him, for in defending Bello, we defend the very idea of patriotic governance.”