THE IMPACT OF CORRUPTION ON NIGERIA ECONOMIC PERFORMANCE 1986 – 2016

THE IMPACT OF CORRUPTION ON NIGERIA ECONOMIC PERFORMANCE 1986 – 2016

The aim of the study is to evaluate the impact of corruption on Nigeria’s economic performance. The specific objectives are;

1. to examine the impact of corruption perceptive index on Nigeria’s economic performance.
2. to determine the extent and rate of Government Expenditure (GEX) on Nigeria’s performance.

OTHER RELATED PROJECT TOPICS HERE

CHAPTER ONE

1.1 Background to the Study

Public debates recently in Nigeria have centered on the increasing rate of corruption resulting from inappropriate public finance planning and implementation mostly in some of the developing countries, Nigeria inclusive which in turn reduces the level of economic growth in the country.

Corruption has become a global problem and no country of the world is totally free of its intimidating far-reaching daunting effects (Nworgu, 2016). It has affected many countries all over the world especially the developing countries. It has various implications for both developed and developing countries. Though, it’s obvious that developing countries are the worst hit by this all-sided virus. Corruption is inimical to economic growth, promotes poverty, and thus leads to greater uncertainties.

Supporting Nworgu’s argument Kayode (2014) argued that corruption is a phenomenon prevalent globally although, it is pervasive and in most cases celebrated in third world countries. This has led to a situation where socio-economic maladies characterized by the high rate of unemployment, inflation, poverty, infrastructural deficits, under-performing institution, widespread hunger, and slow and/or stagnant economic growth has become common denominators in the third world countries, especially Africa. Nigeria and Ghana not excluded.

Omenka (2013) asserts that corruption has been adjusted to be a key factor responsible for Nigeria’s underdevelopment. Nigeria’s anti-graft agencies including the Economic and Financial Crimes Commission (EFCC) as well as the Independent and Corrupt Practice Commission (ICPC) have continued to make staggering revelations concerning looted resources, misappropriation of funds and in most cases outright stealing of funds by private businessmen, political office holders, and civil servants. Obviously, all these acts of greed and absence of patriotism are not free of economic consequences as it has left us poorer, more underdeveloped, plus its accompanying national stigma among another committee of nations.

Corruption made itself visible when the institution of the government was founded due to the behavior of people appointed or elected to manage the government institution (Anyanwu, 2002; Idomch, 2006). Corruption has recently become a major issue in foreign aid and Nigeria nation as a whole.

Corruption is a social problem that has interested many scholars. Ruzindana (1999) sees corruption in Africa as a problem of routine deviation from affordable standards and norms by public officials and parties with whom they interact. The major concern for inter-nation aid policy during the last five decades has been to improve the living conditions for the poor in the poorest countries of the world. But the government in poor countries is also the most corrupt country due to the high level of poverty.

Corruption is a disease that eats into the culture, political and economic growth of any country and as well destroys the functioning of various organs of the government. Transparently international (2005) opine that “corruption is one of the greatest challenges of the contemporary world which undermines government, fundamentally distorts public policy leads to the misallocation of resources harms the private sector development and as well hurts the poor”.

The need to study corruption and economic growth in Nigeria has continued to generate passionate commentaries and academic interest due to the level of corruption in the country and its effect on economic growth. In Nigeria, corruption is one of the reasons for many unresolved problems that have critically hobbled and reduced development (Ayobolu 2006). It also remains a long-term major political and economic growth challenge for Nigeria (Sachs, 2007) international center for economic growth (1999) states that corruption is a cankerworm that has eaten deep in the fabric of the nation which ranges from petty corruption to political or systematic corruption. Corruption is a cankerworm that has reduced development in all sectors of the economy (EFCC, 2005). Corruption has been the primary reason behind the country’s difficulties in developing fast (ICPC, 2006). Ribadu (2003) states that this is the reason why transparency international has consisted rating of Nigeria as one of the top three most corrupt countries in the world.

In Nigeria, the level of corruption, the poor state of our electricity, transport sector, health sector, education sector, and communication is the major problem of economic growth and it is a major handicap for doing business in the country. As part of fighting corruption strengthening the economy, the Nigerian government have over the years embark on series of economic growth reforms through privatization, banking sector reform anti-corruption campaigns, and establishment of transparent fiscal standards such as ICPC EFCC e.t.c. The major aim of economic reform in Nigeria is to provide a conducive environment for private investors and the FBI to flow (African economic outlook 2011).

Corruption in Nigeria is a menace to the people and the country at large. Besides, Nigeria has other factors that have battered her economy system. These are no other things than the war against Indiscipline, political crisis and the Economic and Financial Crimes Commission (EFCC) have been employed and adopted by past regime administrations to curb the evil practices, but all proved abortive, while the economic recession is on the increase. How long should this continue?

According to a statement in the Daily Times (1999),” decades, children are born to see and learn of this enemy of development”, why should we allow this to continue? We need to join hands on these criminal behaviors in other to protect present and future generations of our great country. Corruption has really been the bane of this country. All hands must be on deck. Osisioma(1999) Nigeria was grouped as the second position and the sixth position of the world’s most corrupt countries. The sequences of the position above show little improvement which is not significant for stopping the worry of patriotic Nigerians on the matter. The instinct of corruption normally begins with ungratefulness and greediness. As stated by Malick (1994) the origin of corruption is that it is influenced by the quest for more material wealth.

The wealth of this nation is being looked at by a few privileged individuals known as civil servants and politicians who are busy acquiring their ill-gotten wealth by inflating contracts diverting public assets into the personal economy in different ways. According to Akara(2012), corruption in all its ramification in any society is the symptom of the society regenerated, if only the society itself becomes aware and conscious of its dangerous descent into the abyss of self-extension. Corruption in Nigeria has really affected the public sector and has spilled to other sectors of the economy such as private sector businesses and households. Nigeria year in year out, many people are initiated into different forms of these sharp practices.

1.2 Statement of the Problem

Though the public sector is the machinery of government in achieving meaningful development in the area of infrastructures, education, and health, etc. The failure to achieve any of these developmental scourge is very important to need immediate attention.

The efforts of the Independent Corrupt Practices Commission (ICPC) and the Economic and Financial Crime Commission (EFCC) have done little in curbing this monster as cases and magnitudes of corruption is still significant. However, the statement of this research problem is focused on the fact that corruption has impacted negatively on Nigeria’s economic performance and yet it’s not adequately considered or looked into as a serious fact to the poor economic growth of the nation Nigeria. Therefore the researcher seeks to highlight the effect of corruption on Nigeria’s economic performance and adequate attention.

1.3 Aim and Objectives of the Study

The aim of the study is to evaluate the impact of corruption on Nigeria’s economic performance. The specific objectives are;

1. to examine the impact of corruption perceptive index on Nigeria’s economic performance.
2. to determine the extent and rate of Government Expenditure (GEX) on Nigeria’s performance.

1.4 Research Hypotheses

For the purpose of this research, some relevant hypotheses shall be stated and tested for the cause of this study.

Ho₁: Corruption perception index (CPI) has no significant impact on Nigeria’s economic performance.

Ho₂: Government Expenditure (GEX) has no significant impact on Nigeria’s economic performance.

1.5 Significance of The Study

The significance of this work lies in the fact that with less corruption the Nigerian economic growth stands to gain in its effort towards development. This study attempts to answer the question; What is the impact of corruption and economic growth, The cause of corruption, and how the present state of corruption will be lessened. This work stands to benefit Nigeria as a whole. This work intends to bring forth ways to lessen corruption for the purposes of increasing economic growth.

This work will be beneficial to schools and will help them understand the consequence of corruption in Nigeria.

1.6 Scope/Limitation of the Study

The research focuses on the relationship between Corruption and Nigeria’s Economic performance. The Research period will range from 1986 to 2016. This is informed by the fact that the period from 1986 to 1998 witnessed minimal corruption incidence while the period from 1999 to 2015 witnessed an increased presence of corrupt practices. We shall, therefore, ascertain how these have over time impacted on Nigeria’s economic outcome. Corruption also undermines public service delivery by reducing the state budget dedicated to services and goods, making the latter poorer in volume and quality. Findings suggest that corruption undermines the delivery of public services in countries around the world, leading to low quality of life for vulnerable individuals and societies. As a result, citizens in corrupt states lose their trust in government-run or government-funded public services, particularly in the areas of education, healthcare, transportation infrastructure, waste management, and, amongst others, water, and sanitation. It is worth mentioning that low-income households tend to pay bribes more, compared to middle and high-income families, in order to access (supposedly) public services. Moreover, due to the lack of financial means, low-income households cannot easily avoid the burdens associated with corruption by switching from public to private services.

1.7 Organization of The Study

The research follows a standard scientific procedure. The first chapter incorporates the Introduction, Statement, Aim and Objectives, Research questions and Hypothesis, Scope, Significance, and Organization of the entire analysis. The second part of the analysis revealed the relevant literature included in the work. Chapter three consider the method adopted for data gathering and analysis. In chapter four results and data, presentations were carried out. Chapter five is purely preoccupied with summary, conclusion, and policy recommendations.