AN EXAMINATION TO THE CAUSE AND EFFECT OF CORRUPTION IN THE NIGERIA ECONOMY

CHAPTER ONE

      INTRODUCTION

BACKGROUND OF STUDY

The truism that corruption is a surest route that hinders development in any society does not need contention. Though, in some quarters, it is argued that corruption could trigger development (Otite, 1986). However, despite this assertion, there is a widespread held opinion condemning corruption in all ramifications and hence, worldwide outcry and call for eradicating the scourge. Evidence may abound that corruption could aid development; no such evidence could be claimed to any root most especially developing state (Nigeria inclusive). Compelling evidences across the globe demonstrate that corruption is an anathema to development (khan, a). Furthermore, evidences in Nigeria have shown that corruption does more harm than good. This is evident in the fact that despite Nigeria‟s abundant natural resources the country is classified among poor countries in the world. Added to this is the fact that about 54% of the population earns less than $1 per day. It needs to be stated that the incidence of extreme paradoxes of widespread and endemic poverty and hunger in the midst of plenty is a manifestation of corruption enmeshed in deteriorating condition of living (Ali, 2008). Statistics had also shown that “Nigeria is among the four largest economies in Africa” with a real GDP of 58.4 billion dollar and a population of about 140m” (Ibid).

Similarly, the enormous revenue generation capacity from oil and non-oil sectors, woefully contrasts with the decaying public infrastructures and extent of institutional development recorded. As it was rightly asserted by Salawu (2007), the phenomenon of corruption in Nigeria has made it impossible for Nigerians to enjoy the dividends of democracy and indeed the gifts of nature with which the country is greatly and abundantly endowed. This scenario is an acknowledgement that the state of affair in the country today is a reflection of pervasive corruption which has eaten deep into every facets of Nigeria life. Without gain saying, it is a wide held belief that corruption is a way of life in Nigeria and that it is responsible for broken promises and dashed hopes which has characterized the lives of most Nigerians. It is not surprising to hear people saying that Nigerians are corrupt. Making it a fait accompli. More so, Nigeria is a country where corruption is rife and where greed for material acquisition and quest for political power had relegated to the background morals preached by various religions. This is because despite our claim to be religious, our quest for relevance had made nonsense of our self acclaimed religiousity and nothing can be left undone by our elites and non-elites for the realization their self desire. The end, it is believed, justifies the means. To this end, there is now the increasing realisation about the ill effects of corruption on the nation‟s social, political and economic fabrics. Though, it is evident that there is no country that is totally free from corruption, the incidences of corruption is on the increase especially in poor and underdeveloped states. The Anti corruption efforts of the Nigerian government have proved ineffective, hence, large scale corrupt related cases, accusations and counter-accusations. There were cases of missing funds, police pensions scam, missing oil revenue or non-remittance into the federation account, contract scam, oil theft, administrative inefficiency or dereliction of duty, illegal sale or allotment of government land and property, bribery, extortion and other forms of corruption, economic and financial crimes. In view of the above, it is imperative to undertake a review of the causes, effects and probable solutions to this menace. Following the introduction, are the other seven subsections, thence, this discourse, is organized as follows; the definition of corruption in Nigeria, perspectives, causes and effects of corruption. Others are the probable solutions and conclusion which forms the least nucleus of the work

Corruption is Nigeria’s biggest challenge. It is clear to every citizen that the level of corruption in the country is high. It’s found in every sector of society. Be it a small or big sector, there is every possibility of observing corrupt practices when critically examined.

What is corruption? It’s the dishonest or fraudulent conduct by those in power, typically involving bribery. It is the illegitimate use of power to benefit a private interest (Morris 1991). Corruption is the giving of a bribe to an official so that the truth will not be told. It involves the embezzlement of public fund for personal use and any act which is considered to be criminal act according to the law of a particular society.

Corruption is potent cancer that has mercilessly eaten Nigeria to a state of stupor-Professor Peter U. Nwangwu.

 CORRUPTION DEFINED

The utility of corruption both as a concept and as a phenomenon is in contest. That is, it is a contested concept that takes varied forms. What is universal is that at least two (2) elements will be involved and the intent is to satisfy pecuniary or selfish interests either directly or indirectly. Corruption is a global phenomenon, and has been with all kinds of societies; be it Advanced, Primitive, Modern or Traditional, as a global scourge. It is a universal phenomenon which presents itself in different colourations and dimensions and, wide spread in terms of coverage. The concept attracts different meanings from different people particularly the social scientists. Thence, its implications for different geo-political zones of the international community constitute a moot point. Corruption like most concepts in social sciences is classified into the group of concept described by Gallie as highly contestable concepts. Thus, the definition that may be attached can be dissected and restricted. Onigu Otite defined corruption as “the perversion of integrity or affairs through bribery, favour, or moral depravity… societal impurity” (cited in Okafor, 2009). Lipset and Lenz (2000) define corruption as an “effort to secure wealth or power through illegal means for private gain at public expense” (Fagbadebo, 2007). Corruption, according to Nkom (1982) is the perversion of public affairs for private advantage. Nkom was also of the view that corruption includes bribery or the use of unauthorized rewards to influence people in position of authority either to act or refuse to act in ways beneficial to the private advantage of the giver and then that of the receiver. It includes the misappropriation of public funds and resources for private gains, nepotism etc. In a similar vein, Doig (1996) described corruption as, the use of official position, resources or facilities for personal advantage, or possible conflict of interest between public position and private benefit. This involves misconduct by public officials and usually covered by a variety of internal regulations (Public Service Rules and Extant Rules). From the above, it is common to find people referring to corruption as the perversion of public affairs for private advancement. Therefore, corruption in this sense includes bribery, kickback, misappropriation, misapplication or the use of ones position to gain an undue advantage. Thus, any transaction which violates the duty of a public office holder and aimed at acquiring or amassing resources illegally for personal advancement and self gratification is seen as an act of corruption. Put differently, any intentional deviant behaviour for personal foredeal is a corrupt act. Gibbons (1976) sees corruption in terms of politics and believes that political corruption has to do with the way public office forsakes public interest measured in terms of mass opinion in order to ensure that some form of political advantage are achieved at the expense of public interest. A more encompassing description of corruption was given by Akindele (1995) who opined that corruption is a socio-political, economic and moral malaise that is usually holistically permeates all the nerves of any society. The concept of corruption, as observed by Akindele (1995), has ideological, moral, cultural and intellectual discourse. Another simple, uncomplicated and encompassing definition of corruption that is found to be useful is the one that sees the phenomenon as the acquisition of that personal benefits which one (as a member of society not public official alone) is not entitled to (Salawu, 2007). Corruption, seen from this perspective therefore represents a departure from what the society considers as correct procedures in exchange of goods and services on the part of everybody that makes up the society. The implication is that corruption is seen in various societies from the perspective of the prescribed social life of the people. The proposition is that, while some societies speak of corruption mainly in terms of illegal acquisition of material resources or benefits, others tend to broaden it by attaching social and moral values to it (Metiboba, 1996). The deduction from above is that what someone regards as a corrupt act is seen differently by another person. The 1999 and other previous constitutions established a code of conduct for public officers and made it a political objective for the state to abolish all corrupt practices associated with abuse of power. However, it does not define corruption or give a list of acts that will amount to corruption. It has also been observed that the statutory criminal laws, the criminal and penal codes, do not define corruption. The Independent Corrupt Practices (and other related offences) Commission (ICPC) Act 2000, and the Economic and Financial Crimes Commission (EFCC) Act 2004 have now broadened the definition of corruption. The EFCC act empowers the commission to investigate, prevent and prosecute offenders who engage in: Money laundering, embezzlement, bribery, looting and any form of corrupt practices, illegal arms deal, smuggling, human trafficking, and child labour, illegal oil bunkering, illegal mining, tax evasion, foreign exchange malpractices including counterfeiting to currency, theft of intellectual property and piracy, open market abuse, dumping of toxic, wastes, and prohibited goods (EFCC Act, 2004) This paper agrees with Lipset (1995) that corruption involves a deviation from the laws and regulations with intent to abuse ones public office and obtain private benefits. Second, the resources exchanged in corruption result in material advantages, as when a favourable public decision is paid for with money. Corruption is therefore one form of influence of money on politics. Third, that corruption always involves clandestine transactions as it is an unacceptable form of transaction.

STATEMENT OF PROBLEM

Corruption has a dynamic impact, which is felt more by poorer households and smaller firms with a long run negative impact on growth, primarily through reduction in human capital and investment. And the damage that corruption does is widely felt across the economy. It is associated with poor public finance management and provision of public goods, an increase in barriers to doing business and consequent lower levels of investment, especially foreign direct investment. Government effectiveness is also damaged as talent in public institutions is eroded. Finally, corruption is associated with lower average standards of living, education levels and greater income inequality.

Our results show that corruption in Nigeria could cost up to 37% of GDP by 2030 if it’s not dealt with immediately. This equates to around US$1,000 per person in 2014 and nearly $2,000 per person by 2030. But if Nigeria can tackle corruption to bring it down to levels seen in similar resource-rich countries, it could increase its GDP by $534bn in 2030. The boost in average income that we estimate, given the current per capita income, could significantly improve the lives of many in Nigeria, should efforts to tackle corruption succeed.

RESEARCH OBJECTIVES

1.To find out the cause and effect of corruption in the Nigeria society

2.To analysis corruption in different sectors in the Nigeria society both in public and private sector

3.To find out possible solution to end the menance called ’’corruption’’

4.To find out corruption has contributed to most economic problems\

RESEARCH QUESTIONS

1. What is  the cause and effect of corruption in the Nigeria society?

2. How  is  corruption seen in different sectors in the Nigeria society both in public and private sector?

3. What are the  possible solution to end the menance called ’’corruption’’?

4.How has corruption has contributed to most economic problems?

SIGNIFICANCE OF STUDY

The study will enlighten the public on the dangerous effect of corruption to the Nigeria economy and possible way out. Since there is no much work done on this, it will contribute to existing knowledge. The study will also be useful to government of Nigeria on how to  curb the menance and restore hope to the Nigeria society.

SCOPE OF STUDY

This  study  aim at evaluating the effect of corruption in an economy and using the Federal Republic of Nigeria as a case study. 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 reduce development (Ayobolu, 2006). It also remains a long-term major political and economic growth challenge for Nigeria (Sachs, 2007). International centre for economic growth (1999) states that corruption is a canker worm that has eaten deep in the fabric of the nation which ranges from petty corruption to political or systematic corruption. Abiodem (2007) in World Bank studies put corruption at over $1 trillion per year accounting for up to 15% of the Gross Domestic Product of nation like Nigeria. Corruption is a canker worm that has reduced development in all sectors of the economy (EFCC, 2005). Corruption has been the primary reason behind the country 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.