Corruption and the Nigeria External Reserves Management

Abstract

This study investigates the impact of corruption on the Nigeria external reserves management. ADF unit root test, Johansen Co-integration, ECM, granger causality and OLS were the technics implore in estimating the data for this study and it reveals that there is a unidirectional relationship between corruption and external reserves and that corruption is positively related to external reserves though corruption is a menace that has eaten deep into the nation’s economy and it is embedded in the management process of our external reserves.  Exchange rate has a positive relationship with external reserves. The study concluded that corruption is embedded in the management process of our external reserves. The process of managing the nation’s external reserves causes corruption in the country and that corruption has grossly affected the polity of Nigeria and it is seriously affecting the ability of the country to grow.

Keywords: Corruption, Exchange rate, External reserves, management and Gross Domestic Product.