Effect of Money Laundering on Nigerian Economy

Abstract

This study sets out to determine the effect of money laundering (proxy by fraud) on the Nigerian economy (decomposed into gross domestic product, federal government revenue, gross fixed capital formation). Ex-post facto research design was adopted. Secondary data were used in this study from Ministry of Finance, Budget office of the Federation and Central Bank of Nigeria statistical bulletin. The Augmented Dickey-Fuller (ADF) was used to test the time series data for stationarity. The co-efficient of regression was used to determine the significance of the relationship and direction of the variables used in the study. The result revealed that money laundering has a negative significant relationship with the Nigerian economy at 5% level of significance. The study recommends that there is need to re-appraise the re-established institutions (such as economic and financial crimes commission and independent corrupt practices and other related offences commission) fighting economic crimes particularly, their statutory functions

Keywords: Money Laundering, Fraud, Gross Domestic Product, Nigeria Economy

JEL Classification: G14, M40, O10