Impact of Corruption on Nigeria’s Growth – Research Plan

2638 words (11 pages) Essay in Economics

20/11/17 Economics Reference this

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Corruption is one of the major obstacles to Nigeria’s growth and development, the impact of corruption has certainly emerged as one of the main barriers to national growth and development in contemporary Nigeria. Although corruption is a global phenomenon, it is the single most important social problem in Nigeria today. It has afflicted a variety of social groups and the nation has suffered severe losses economically and socially.

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In Nigeria, the presence of human and natural resources is so abundant, but their development for the betterment of the welfare of the citizens has been problematic. The estimated population of Nigeria in 2006 was 140,431,790 (Federal Republic of Nigeria, 2006), making the country the most populous in Africa. Corruption is not only pervasive, alarming and endemic in Nigeria but according to Achebe (1983), it has entered the fatal state in the country. Corruption in Nigeria is a symptom of poorly functioning state and it is capable of retarding socio-political and economic development. Corruption stands as a threat to our democratic order, political stability and sustainable national growth and development.

1.1 Background to the study

Corruption has been present in the world from the inception of Man, it was recorded in the Jewish mythology that Jacob the patriarch of the Israeli race deceived his brother Esau into acquiring his inheritance false fully; Ancient civilization has traces of widespread illegality and corruption. Over the years it’s been observed that corruption is capable of creating undesirable results even from excellent economic policies and development plans. The World Bank 2000 identified corruption as the single greatest obstacle to economic and social development as it distorts the rule of law and weakens the institutional foundations which economic growths depends.

Corruption is by far the greatest challenge to our national economic and political development. Corruption needs to be granted a state of emergency status if our country is to regain and retain its wealth and prestige and begin to function optimally for the benefit of the Nigerians. If the truth must be told, corruption now affects virtually all parts of the Nigeria society. It has eaten deep into our core values as a nation.

Today, the quest for money has become a virtue in itself in Nigerian society. And there is hardly any question asked about how people come about it. Corruption imposes a heavy burden on small and medium-sized enterprises, and tends to shift government spending away from socially beneficial investments, such as health, education, roads and communications towards unneeded “white elephant” projects, or lower quality infrastructure. Corruption discriminates against honest foreign businesses as a result of lack of transparency in most acts of corruption. In this process, beneficial direct investments often pull out of the country.

Corruption reduces domestic savings and investment and stimulates capital flight, as it weakens domestic banking system. Corruption is one of the most important inhibiting forces on investment and growth, thereby lowering the living standards of the people. Corruption often discourages donors from providing more aid, which harms opportunity for economic growth.

In the education sector, examination malpractices have become common, and the most lamentable aspect of the situation is that parents are said to aid and abet with money, the acquisition of false education certificates by their children. Forgery of documents and the so-called 419 practices especially through the internet have become so rampant that unverified documents emanating from Nigeria are suspects in many other countries abroad, in a society where money is worshiped, there is hardly any scruple or restraint on what those with a criminal bent can do to acquire wealth.

Corruption has remained the key obstacle to our national development, how else can one begin to explain the fact that our infrastructure, especially our roads and other transportation networks, our education institutions and our hospitals, amongst others, have not benefited more appreciably from the large revenue that this country has earned from its export of crude oil, Nigeria has a tremendous amount of natural resources, including petroleum products, large amount of reserves of natural gas, tin, iron ore, coal, and limestone. Its agricultural products include cocoa, peanuts, palm oil, corn, rice, sorghum, millet, cassava, yams and rubber; livestock including cattle, sheep, goats, pigs; and timber and fish. Industrial products include crude oil, coal, tin, columbite, palm oil, peanuts, cotton, rubber, wood, hides and skins, textiles, cement, food products, chemicals, fertilizer, printing, ceramics, steel exports, cocoa and rubber, Nigeria ranks 158th of 177 countries measured in the United Nations Human Development Index (UNDP 2008). While majority of Nigeria’s population living below the poverty line is at 70 percent in 1999, over half the population lives on less than US$1 per day, (IMF 2007). This translates into approximately 80 million Nigerians living in poverty. Only China and India have larger populations of poor people (DFID 2004).

Serious attempt at fighting corruption was first made in 1983 by the shehu shagari administration when he established the new ministry of National Guardians to fight corruption, to install discipline and raise the moral tone of our society. His government was short lived, succeeding governments introduced the War against Indiscipline (WAI): Mass Mobilization for Social Development and Economic Recovery (MAMSER): and The National Orientation Agency (NOA). It’s undisputable that Nigerian governments have made efforts to bring to a very minimal level the issue of corruption in Nigeria.

In 2006 Nigeria developed the vision 20:20:20 agenda which entails that Nigeria would be among the top 20 economies in Nigeria by the year 2020, in the words of Joaquim Chissano, former Mozambian president, Nigeria’s dream of becoming one of the world’s 20 biggest economy by 2020 will remain a pipe dream unless corruption is addressed and brought under control. Nigeria has enough human and material resources to sustain that dream. However this ambitious benchmark can only be attained if the country manages to tame corruption, the monster that is undermining all development initiatives and efforts of our economies. It is in fulfillment of this dream that the Nigerian leader of the fourth republic president Olusegun Obasanjo on 2003 established EFCC with a constituting instrument: The EFCC establishing act 2004, with its headquarters at Adetokumbo Ademola crescent wuse. Its present acting chairman Ibrahim Lamorde. It investigates financial crimes such as advance fee fraud (419 frauds) and money laundering. Established in 2003 partially in response to pressure from the financial action task force on money laundering (FATF). The first chairman Nuhu Ribadu, followed by chief(Mrs.)Farida Waziri in 2008 and presently with its acting chairman Ibrahim lamorde (publication of EFCC vol4,2 July 2009).

Also in the resolution to fight corruption and win the war in Nigerian, led to the promulgation of the corrupt practice and other related offences act 2000.the act was the first bill presented by Olusegun Obasanjo to the national assembly for consideration at the inception of the democratic administration in 1999.the act was signed into law 13th June 2000 and established the independent corrupt practice and other related offences commission(ICPC).which is the apex body saddled with the responsibility of fighting corruption and other related offences with its chairman as Justice Emmanuel Ayoola.

Finally it’s been established that corruption has lead to the underdevelopment of many sectors in the economy, starting from the public sector, the education sector, health, business, agricultural and religious sectors etc. It can also be seen that governments has made efforts in curbing the spread of corruption in the country, through the establishment of several anti-corruption institutions like the EFCC, ICPC etc. This study will be centered mainly of the workings of corruption on national economic growth and development mainly during the democratic dispensation from 1999 to date.

1.2 Statement of research problem

The effects corruption has on economic growth cannot be overemphasized; corruption is one of the greatest causes affecting the overall national development of the Nigeria economy. Nigeria as a developing nation is plagued with numerous political and economic challenges but the issue of corruption has broken deep into the fabrics of our society. Corruption in Nigeria leads to slow movement of files in offices, police extortion at tollgates and slow traffic on the highways, port congestion, queues at passport offices and gas stations, ghost workers syndrome, election irregularities among others.

Thus, it is believed by many in the society that corruption is the root problem of Nigeria. Corruption has been endemic in all governments, that is not peculiar to any continent, region, ethnic group. It cuts across faiths, religious denominations, and political systems and affects both young and old man and woman alike. Corruption is found in democratic and dictatorial polities; feudal, capitalism and socialist economies, Christians, Muslims, Hindus, and Buddhist cultures are equally bedeviled by corruption, and corruption did not start today, the history is as old as the world.

Research Questions

The issues of corruption, economic growth and development have become major policy discourse globally. To this extent the research work has generated a set of questions which include the following:

i. How has corruption affected the economic growth of Nigeria?

ii. The types and forms of corruption we have in Nigeria?

iii. How can the issue of corruption be curbed?

These are the research questions which the study attempts to provide answers.

1.4 Objectives of the study

The main objective of this study is to explore the impact of corruption on national growth and development in Nigeria, as well as the several limiting factors, hindering their operation of anti-graft agencies in Nigeria, such as political interference, managerial problems, lack of integrity on the part of EFCC officials, government interference, inadequate officials, finance, inadequate public awareness campaign, slow pace of litigations lack of necessary information technology equipments for trapping down corrupt practices etc and their prospects towards fighting corruption in Nigeria. Among the other objectives includes:

  1. To explore the causes of corruption in Nigeria.
  2. To show the relationship between corruption and economic growth.
  3. To generally appraise the effort of democratic regimes in abating corruption in Nigeria.
  4. To examine the efforts of government through it agencies and parastals(EFCC and ICPC) in curbing the menace of corruption.

1.5 Significance of the study

Corruption has continued to bring to a continual decline, the developmental plans of the country, As such a study as important as this should not be neglected. Thus, this study will be channeled basically to explore the causes and effects of corruption on the Nigerian Economic growth process and ways of combating corruption in Nigeria and the relationship between corruption and economic growth in other to enhance socio-economic and political development, Thereby realizing the vision 2020 of becoming one of the world’s largest economies.

At the end of the study, it will be of great importance to addressing the menace of corruption and its way of hindering the smooth economic and political development of Nigeria.

The findings of this study will help in enlightening Nigerians on the evils of corruption especially in a developing nation like Nigeria, this study would measure the impacts corruption has on the Nigerian Economic growth

1.6 Scope and limitation of the study

A study as important as this, ought to have taken the researcher to virtually all over the country, and should have assessed all the administrations of Nigeria, starting from the first republic till the present dispensation, but the work will be too bulky and cumbersome.

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Thus, this study will be limited to the appraisal of the democratic regime of president Olusegun Obasanjo, Yaradua and Goodluck Jonathan in management of corruption through the instrumentality of EFCC and ICPC in attainment of national and economic development. The study will cover corrupt issues between 1999-to date. Hence particular emphasis and interest will be placed on political office holders during the regime.

The limitation of this research work also includes:

Time constraint: The time within which to submit this project equally serves as a limitation to this research.

1.7 Plan of the study

This study will take a five chapter format, with chapter one taking the introductory part of the study, the statement of research problems, research hypothesis, statement of objectives, the scope and limitation of the study, the plan of the study, the significance of the study and operational definition of terms.

Chapter two is the literature review and theoretical framework. This includes the concept and origin of corruption, concept of national development, overview of democratic administration, reasons for increase rate of corruption over the years, the effects of corruption on national development, mechanism for curbing corruption in Nigeria etc.

Chapter three deals with the research methodology containing the introduction, source of data, population of sample size and sampling technique, method of data collection and method of data analysis.

Chapter four treats the data presentation and analysis, which include introduction, testing of hypothesis, and discussion of findings

Finally chapter five contains the summary, conclusion, and recommendations.

1.8 Definition of terms

Corruption: According to advance learners dictionary 4th edition, corruption means willing to act dishonestly in return for money. Evil or immoral, etc.

Perhaps, because corruption has received an extensive attention in the communication and perhaps due to the fact that it has been over flagged in the academic circles, corruption has received varied definition. Corruption or corrupt behavior, involves the violation of established rules for personal gain and profit.

Corruption is effort to secure wealth or power through illegal means: private gain at public expense: or a misuse of public power for private benefit. In addition corruption is a behavior which deviates from the normal duties of a public role, because of private (gains) regarding (personal, close family, private cheque, pecuniary or statue gains, it is behavior which violates rules against the exercise of certain types of (duties) for private gain.

National development: National development refers to an overall integrated transformation in virtually all sectors of the economy. It involves a positive growth simultaneously in all sectors of the economy, ranging from the health sector to the education, oil and gas, religion, business, manufacturing and agricultural sector etc.

Regime: This refers to a period of the reign of a particular constitutional government.

Bribery: The payment (in money or kind) that is taken or given in a corrupt relationship. This includes kickbacks, gratitude, pay-off, sweetness, greasing palms, etc.

Fraud: It involves some kind of trickery, swindle and deceit, counterfeiting, racketing, smuggling and forgery.

Embezzlement: This is theft of public resources by public officials

Extortion: This is money and other resources extracted by the use of coercion, violence or threat to use force. Especially by police and custom officers are the main culprits in Nigeria.

Favoritism: This is a mechanism of power abuse implying a highly biased distribution of state resources .it is seen at a natural human proclivity to favor friends, family and anybody close and trusted.

Nepotism: This is a special form of favoritism which an office holder refers his/her kin folk and family members. In Nigeria it occurs when one is exempted from the application of certain laws or regulations or given undue preference in the allocation of scarce resources.

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