Wealth Taxation, Capital Flight, and Inequality Reduction in Nigeria: Evidence and Policy Design

This doctoral study develops the first comprehensive analysis of wealth taxation feasibility, capital flight risk, and inequality reduction potential for Nigeria. Rising wealth inequality, driven by the concentration of petroleum rents, real estate appreciation, and financial asset accumulation among a narrow elite, has intensified calls for wealth taxation as a complement to income-based redistribution. However, the design of wealth taxes in capital-mobile developing economies requires careful analysis of the tradeoff between redistributive gains and the risk of capital flight that would undermine the tax base and potentially harm investment and employment. The study develops a three-stage analysis: first, constructing a Nigerian wealth distribution estimate using a combination of Forbes rich list data, household survey imputation, and Pareto tail extrapolation methods to fill the top-wealth gap in official statistics. Second, modelling the behavioural response to a hypothetical annual wealth tax of 0.5 percent to 2 percent, including capital flight elasticities estimated from South African and Kenyan wealth tax experience adapted to Nigerian institutional conditions. Third, embedding the wealth tax design in a general equilibrium simulation assessing net redistributive impact after behavioural responses. Complementary qualitative analysis examines the political economy feasibility of wealth taxation in Nigeria's clientelist fiscal environment. The study expects to find a revenue-maximising wealth tax rate in the range of 0.8 percent to 1.2 percent, substantially below rates that would trigger economically damaging capital flight. Keywords: wealth tax, capital flight, inequality, wealth distribution, redistributive policy.