Money Laundering and Economic Growth in Nigeria: A Bound Test Analysis.

Abstract

In spite of the government's attempts to combat money laundering through the implementation of various policies which is also aimed at boosting the GDP, the prevalence of money laundering remains a cause for concern in Nigeria. This research delves into the correlation between money laundering and the expansion of the Nigerian economy e spanning from 1993 to 2019. This study adopted the Augmented Dickey Fuller (ADF) test to assess if the time series attributes of the research variables demonstrate stationarity. Furthermore, the research applied the Auto-regressive Distributed Lag (ARDL) method to explore the connection between money laundering and the advancement of the Nigerian economy. The results indicated a negative short-term correlation between economic growth (LNGDP) and the independent factors like money laundering (ML), interest rate (INT), investment (LNINV), and exchange rate (EXR). Based on the outcomes of this study, the study recommends reinforcing strategies against money laundering and intensifying the endeavors of pertinent authorities to counteract money laundering activity. Additionally, there should be an increased worldwide cooperation in implementing regulations against money laundering and addressing issues related to jurisdiction.