Corruption and Economic Growth in Nigeria: An Empirical Analysis 1996 - 2013

Abstract

That corruption is the bane of Nigeria’s socio-economic development is to state the obvious. Today, in Nigeria, there is a consensus among well-meaning individuals and foreign nations that corruption has inevitably become a major clog in the quest for sustainable growth and development. It is further agreed that it must be halted before it shut down the country. Since 1996, Nigeria was labeled the most corrupt nation three times: 1996, 1997, and 2000: and placed in the bottom five four more times: fifth from the bottom in 1998 and second bottom in 1999, 2001, 2002 and 2003. Thus, this study investigates the impact of corruption on economic growth in Nigeria for the period 1996 – 2013. The result of the regression analysis shows that there is a negative relationship between the dependent variable (GDP) and corruption level in Nigeria. This invariably means that as the level of corruption activities increases, economic growth decreases significantly. This findings thus made the argument against corruption relevant. Based on the findings, we therefore recommend as follows: The activities of the anti-corruption agencies in Nigeria such as the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Related Offences Commission (ICPC) should be strengthened; The public should be educated about the problems that corrupt practices create for the economy and the society at large, and be discouraged from participating in corrupt practices. Nigerians should put in leadership positions honest individuals who would serve as role models to minimize the negative consequences of corruption with its negative impact on the development and growth of Nigeria; corruption is made easy in Nigeria because government involvement in economic decision making is high. Therefore, privatization of government business interest especially in the oil sector should be carried out.

Keywards: Corruption Economic Growth, Privatization, Transparency Nepotism, Vandalisation.