ABSTRACT
This research examines the impact of corruption on
Nigerian Economy. It portrays a cursory
investigation on the observed effects of corruption on different sectors -
Public, Private and Foreign Sectors of the Nigerian Economy.
In order to achieve a well detailed result, an
econometric analysis was employed to test the relationship between the
dependent variable and independent variables. Tests like the ordinary least
square regression was carried out to evaluate the long run impact of corruption on some selected sectors of
the economy between 1979 and 2009. The findings of the study made it clear that
corruption have both negative and positive impact on the growth of the economy.
However, the negative impact of corruption, on the various sectors outweighs
the positive, which is in line with previous empirical studies/findings.
Finally, the study reveals that corruption is a serious
impediment against the proper functioning of the Nigerian economy and suggests
that to have a healthy economy, the following should be put in place:
restructured legal system, periodic private and public audit, re-orientation
programmes, better remuneration of workers as well as involvement of religious
and non-governmental organizations in the process.
CONTENT PAGE
TITLE PAGE
CERTIFICATION
DEDICATION
ACKNOWLEDGMENT
ABSTRACT
TABLE OF CONTENTS
CHAPTER ONE
1.1 INTRODUCTION
1.2 STATEMENT OF
THE PROBLEM
1.3 THE
AIM AND OBJECTIVES OF THE STUDY
1.4 THE
RESEARCH QUESTIONS
1.5 STATATEMENT
OF RESEARCH HYPOTHESES
1.6 THE RESEARCH
METHODOLOGY
1.7 THE SIGNIFICANCE OF THE STUDY
1.8 THE SCOPE
AND LIMITATION OF THE STUDY
1.9 THE
DEFINITION OF BASIC TERMS
l.10 THE ORGANISATION
OF THE STUDY
CHAPTER TWO
2.1 INTRODUCTION
2.2 DEFINITION
AND CONCEPT OF.CORRUPTION
2.3 CORRJPTION
AND DEVELOPMENT: A REVIEW OF LITERATURE
2.4 CORRUPTION AND ITS IMPACT ON NIGERIAN ECONOMY
2.5 CONDITIONS FAVOURING CORRUPTION IN NIGERIA
CHAPTER THREE
3.1 INTRCDUCTION
3.2 CORRUPTION
IN NIGERIA
3.3 THE
STRUCTURE OF CONTROLLING CORRUPTION IN NIGERIA
3.4 ROLES OF CORRUPTION
FIGHTING AGENCIES IN NIGERIA
3.4.1' ECONOMIC AND FINANCIAL CRIMES
COMMISSION (EFCC)
3.4.2 NIGEHIA FINANCIAL
INTELLIGENCE UNIT (NFIU)
3.4.3 INDEPENDENT
CORRUPT PRACTICES AND OTHER RELATED
OFFENCES COMMISSION
3.5 FAILURE OF
CORRUPTION FIGHTING AGENCIES /COMMISSION
CHAPTER FOUR
4.1 METHODOLOGY
4.2 METHODS OF
ESTIMATION OF ANALYSIS
4.3 MODEL SPECIFICATION
4.3.1 ECONOMETRIC MODEL SPECIFICATION
4.3.2 A PRIORI
EXPECTATION
4.3.3. SPECIFICATION
BIAS
4.3.4 LIMITATIONS OF
THE STUDY
4.4 SPECIFICATION
OF DATA
4.5 EMPIRICAL RESULTS
AND INTERPRETATION
CHAPTER FIVE
5.1 SUMMARY OF
FINDINGS
5.2 RECOMMENDATIONS
5.3 CONCLUSION
BIBLIOGRAPHY
CHAPTER ONE
1.1 INTRODUCTION
The history of corruption is as old as the world because
ancient civilization have traces of widespread 'illegality and corruption',
Thus, Lipset and Lenz 2000 noted that "corruption has been ubiquitous in
complex societies from ancient Egypt, Israel, Rome and Greece down to the present."
Corruption is believed to be endemic in modern
governments and it is not peculiar to any continent, region, or ethnic group.
This does not mean that the incidence and magnitude of corrupt activities are the same in every society. Some
countries are, obviously more corrupt; yet others have better plans in managing
corrupt activities. Obviously, Nigeria is not one or those countries with a better handle on corruption, despite its unending corruption commissions and all
the noise made by every administration on the efforts to transform the nation
into a corrupt free society.
The focus of this study is on corruption in Nigeria with
a view to effectively managing the challenges in the society. The magnitude of
corruption witnessed in the country in the past administrations was alarming
and it does not look \ like the present administration of President Goodluck
Ebele Jonathan would be different from that of his predecessors, Late Umaru
Musa Yar'adua and Chief Olusegun Obasanjo.
Victor E Dike 2003(CEO, Center for Social Justice and
Human Development (CSJHD) in his article 'Managing the Challenges of corruption
in Nigeria' identified the forms of corrupt activities in Nigeria to include
political corruption, bureaucratic corruption, electoral corruption,
embezzlement and bribery, Political corruption, which takes place at the
highest levels 'of political authority, is a 'corruption of greed'. It affects
the manner in which decisions are made, manipulates and distorts political
institutions and rules of procedure. Bureaucratic corruption which occurs in
the public administration is the 'low level' and 'street level' corruption
which the citizens encounter daily at places like
the hospitals, schools, local
licensing offices, encounters with the police,
tax offices, e.t.c.
Electoral corruption includes purchase of votes, undue
disenfranchisement, promises of office or special favours, coersion,
intimidation and interference with freedom of free election.
It is apparently evident that corruption is not peculiar to Nigeria but it is a viable
enterprise in Nigeria because the system does not have the reliable apparatus
to trace and prosecute the 'big politicians’ that engage in grand
thefts. This point to the fact that those in power are to be
blamed more for corruption than the common
people who are often pushed into
corrupt behaviours in their struggle for survival. For example, we recall that
Chief Olusegun Obasanjo made a 'financial deal' with the family of Late General
Sani Abacha who looted the nation. But he fired Mr. Vincent Azie (the then
acting Auditor-General) whose audit report indicted the executive, legislative
and judiciary branch of government for
improper accounting practices. The Abacha deal and Azie's case show that Chief Obasanjo does not have the will
to fight corruption in Nigeria. Also, the administration' of President Yar'adua
failed to prosecute anybody in the Obasanjo administration over the non execution of the power projects that has
engulfed billions of naira (Saturday Punch 22ml November,
2008).
From the foregoing, one of the
identified and agreed factor that has accounted for our low rate of economic growth and
development since independence in 1960 is
corruption.
Being a developing nation with
potentials' and resources at our disposal, the term corruption was not
pronounced due to our value base system, availability and affordability of the basic means of life, good administration that
ensure proper planning and allocation of national resources in the 1960's.
However, the advent of military in
politics, misplacement of priority, abandonment of agricultural system as a
result of oil boom, improper allocation/misuse of oil revenue, embracement of mediocrity and nepotism, wealth
accumulation attitude, fall in the standard of living, increase in unemployment
and high poverty rate; corruption crept into our system. It has gained
acceptable ground that people now see it as an acceptable norm, thereby eaten
deep into all Nigerian even children. Corruption comes in multifarious forms
with its detrimental effects, which have resulted in the low rate of economic
growth and development. Government has shifted
effort and funds that should have been for development to fighting
corruption.
In the world today and even in Nigeria, corruption cannot
to totally eliminated but it call be reduced to the barest minimal. At this
juncture, one can however boldly say that Nigeria will be among the super
powers of the world, if corruption is minima as it is the bane to our
development.
1.2, STATEMENT OF THE RESEARCH PROBLEM
From every perspective, corruption or corrupt practices
has to do with fraudulent activity especially siphon funds that are meant for
the general populace for one's consumption, Right from the beginning, corruption
has been a vermin that has been killing and discouraging Nigeria from moving up
of welcoming new innovations. From historic point of view, Nigeria government
has been left in the hands of those who
only care for themselves, putting aside the yearnings of the entire populace.
Gone are the days when merits, ability, honesty and transparency, as understand
has meaning in Nigeria and this was then actually helping the country to move
up. The likes of Pa Awolowo, Dr. Azikiwe,
General Murtala Muhammed, Tunde Idiagbon (all of blessed memory) would never be
forgotten in the history of Nigeria for being leaders with proven records of achievement. After these great people,
what we have is the helm of affairs. The e of politicians in Nigeria arena are
bunch of criminals, crooks who have in one way or the other indulged in
mischievous activities. One would wonder therefore, why crime, corruption,
poverty, and religious violence have become the fasted growing industry in
Nigeria and this has made our hard
earned democratic government worthless.
'To the best of my little knowledge, the primary concern of
reasonable, caring and competent leader should be the .welfare of his
followers. But in Nigeria, the case is different and so far, while our leaders
pay lip service to fight corruption and poverty reduction, they wallow in
self-adulation, sycophancy, and never seem to be tired of asking for more
benefits for themselves. It is no wonder; then that Nigerians feel no sense of
patriotism as our leaders appear insensitive to the plight of the masses. Imagine, corruption is now a serious Nigerian
phenomenon and it has critically hobbled and skewed Nigeria development to the
wrong side. Where does this come from? One does not need to ask as the whole
sorry development emanates all the way from Aso- Rock, the neat of power.
Government at the central level is the vessel that is
leaking from the top and Aso-Rock and other government parastatals and
departments are the main fountain where corruption takes its source. This is
the reason why one would continue to wonder why Obasanjo should be deceiving
the whole world by claiming that he is going to put an end to corrupt practices
during his regime (1999-2007) by using the leadership of the EFCC as a tool in sending his enemies to places they never believed they would
serve months of their lifetime. Though the EFCC
game worked for him and he had glory but can one believe that the whole
thing was self motivated and was all programmed?
More evidently and recently is the case of removing prior
state governors of Ekiti and Osun who gained power through the back door truly
as a result of bribing their way through the INEC
resident commissioners in those states. One would say thank God the real
governors have been reinstated but to what extent can one beat his or her chest
that such things won't repeat itself in the 2011 elections.
As conclusive remark, worthy of note is that we can't get
foreigners to come and invest in the country and help sustain an industrial
promotion when reports on the rate at which corruption and mismanagement had
eaten, deep into the roots of the country's economy is available for the world
to see. Woe betides all those who perpetuate those fraudulent activities that
dragged this country to this mess and for those who are doing all what it takes
to draw the country out from this dungeon (corruption), one would say kudos and
pray that the fight against this menace that has ripped this country off her
glory will be won some day.
1.3. AIM AND OBJECTIVES OF THE STUDY
This project work sets to achieve the following
objectives:
i. To examine how corruption has hampered
the development of Nigerian economy
ii. To examine
the impact of corruption on Foreign Direct Investment (FDI)
iii. To examine
the causes of corruption on all Nigerian sectors
1.4 RESEARCH
QUESTIONS
In the face of the economic, socio and political
condition corruption has landed Nigeria, the following research questions will evolve:
a) ' Why have
corruption fighting agencies and, policies put in place failed to tackle the
problem of corruption in Nigeria?
b) What are the
alternative means of tackling the problem of corruption?
c) Are these
alternatives easy to come by and welcomed in Nigeria?
d) How can the
hitch encountered in fighting corruption be addressed?
1.5 STATEMENT OF RESEARCH HYPOTHESES
The following hypotheses are kept in focus to act as my
guide:
1. Ho: That there is no significant relationship between corruption and development.
HA: That there is significant relationship between corruption
and development.
2. Ho: That there is no significant
relationship between corruption and foreign direct investment
HA: That there is significant relationship
between corruption and foreign direct investment.
3. Ho: That there is no significant relationship between the
causes of corruption and all Nigerian
sectors.
HA: That there is no significant relationship between the
causes of corruption and all Nigerian
sectors.
1.6 RESEARCH METHODOLOGY:
1.6.1 METHOD
The regression model will be used to test for the
relationship between dependent and independent variables.
1.6.2 SOURCES OF
DATA
This will be through secondary source of data generation
and it will come from Articles in the dailies, library (i.e Text Books), Professional journals, write-ups,
Economic and Financial Crimes Commission Act 2002, Independent and Corrupt
Practice Commission Act 2000, seminar and speeches by Nigerians and
non-Nigerians from the Internet,
1.6.3 STATISTICAL TOOLS:
The econometric analysis will be used to test for the
relationship between dependent and independent variables.
1.7 SIGNIFICANCE OF THE STUDY
This is research work is expected to afford us with the
opportunity of identifying to what extent the "Nightmare" corruption
has hampered the growth and development of this country, Nigeria. This will be
largely achieved through the information gathered from the above mentioned
sources and the test to be later carried out using the specified model. His also expected as a matter of relevance
that the paper work would give way to identifying what loopholes pave way for
corruption in the country in any sector of the economy and what policy models or agencies are put in place towards
ensuring that even though the menace can't be totally eliminated, it is
drastically reduced to its barest minimum.
1.8 SCOPE AND LIMITATION OF THE STUDY'
The study will cover a period of thirty (30) years (1979
- 2009) showing the corrupt practice in both public and private sectors and how
this has affected the country. This study is limited to a temporal scope of
thirty years from 1979 to 2009; despite these, references were made to other
countries.
This study was constrained by several factors including
poor data, reluctance of concerned parties to give facts and figures and
finance.
1.9 DEFINITION OF BASIC
TERMS/CONCEPTS
Corruption: This is any immoral, illegal and unethical act committed
against ones conscience.
EFCC: Economic and Financial Crimes Commission
ICPC: Independent Corrupt Practices
and Other Related Offences Commission.
NFIU: Nigeria
Financial Intelligence Unit.
CBN: Central
Dank of Nigeria
Democracy: Government of
representation by those elected by the citizens
Coup D'etat: A forceful way
of taking over government under the military regime.
CSJHD: Center
for Social Justice and Human Development
Regime: A term used to describe the system or mode of government practiced
in a country at a particular period and time (e.g. Civilian or Military regime)
1.10 ORGANIZATION
OF THE STUDY
In order
to achieve the stated objective of this study~ the project will be divided into
five chapters. Chapter one deals with brief outlook of corruption in Nigeria
within the limit 1979 to 2009.
Chapter two on the other hand is the literature review.
This is where the related literature will be reviewed thereby laying emphasis
on theoretical framework and conceptual issues in order to produce a link
between corruption and its impact on Nigeria economy. Chapter three will
elucidate the structural composition of the study. Chapter four will deal with
Research Methodology, Data Analysis and Interpretation of Results. Chapter five
which will be the last chapter presents the summary, conclusion and recommendations.
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