This study analyses the effects of capital flight on the economic development in Nigeria from the year 1990 to 2023. The objective is to evaluate the impact of capital flight on the nation’s economic development throughout this period. Capital flight is assessed through indicators involving remittance outflows, global debt servicing, and foreign direct investment outflows, whereas economic development is gauged using the Human Development Index (which encompasses factors such as infant mortality, per capita income, and educational attainment), poverty index, and unemployment rate. The research hypotheses align with the study objectives, and a review of relevant literature was conducted. The data for the study was mostly sourced from the Central Bank of Nigeria’s annual reports, the National Bureau of Statistics, and publications from the World Bank. The study employed Autoregressive Distributed Lag (ARDL) and Vector Autoregression (VAR) techniques for data analysis. The findings demonstrate the varied impacts of different forms of capital flight on Nigeria’s economic progress. Foreign remittance outflows and external debt servicing exhibited a statistically negligible effect on unemployment; nonetheless, they displayed significant and robust correlations with human development and poverty indices. In contrast, FDI outflows demonstrated a negative link with unemployment, suggesting that the exit of FDI from the country may indirectly foster employment opportunities or improve productivity in skilled sectors. However, foreign direct investment outflows did not significantly influence poverty levels or the human development index. The study recommends several policy measures: improving infrastructure to reduce business costs and attract investments, implementing policies to increase remittance inflows, and developing a national economic strategy that aligns with financial flows while promoting transparency, legal frameworks, and reducing corruption. The government ought to augment support for small and medium-sized enterprises (SMEs) by facilitating access to financing, offering technical assistance, and instituting capacity-building initiatives, as SMEs are essential for job creation, poverty alleviation, and capital retention.