Implication of Economic and Financial Crimes Commission and Corruption on the Consolidation of Democracy and Sustainable Development and Growth in Nigeria from 2004-2008

Abstract

Nigeria’s inability to consolidate her democracy is blamed largely on the high level of corruption in the country. Corruption is efforts to secure wealth or power through illegal means for private gain at public expense; or a misuse of public power for private benefit. Corruption like cockroaches has coexisted with human society for a long time and remains as one of the problems in many of the world’s developing economies with devastating consequences. Corruption as a phenomenon, is a global problem, and exists in varying degrees in different countries (Agbu, 2001). Corruption is not only found in democratic and dictatorial politics, but also in feudal, capitalist and socialist economies. Christian, Muslim, Hindu, and Buddhist cultures are equally bedeviled by corruption (Dike, 2005). Corrupt practices are not an issue that just begins today; but the history is as old as the world (Lipset and Lenz, 2000). Corruption not only distorts competition, hinders economic growth and endangers the stability of democratic institutions; it pulls down the moral foundation of society (Inokoba and Ibegu, 2011).

In Nigeria, it is one of the many unresolved problems (Ayobolu, 2006) that have critically hobbled and skewed development. It remains a long-term major political and economic challenge for Nigeria (Sachs, 2007). It is a canker worm that has eaten deep in the fabric of the nation. It ranges from petty corruption to political / bureaucratic corruption or Systemic corruption (International Center for Economic Growth, 1999). World Bank studies put corruption at over $1 trillion per year accounting for up to 12% of the Gross Domestic Product of nations like Nigeria, Kenya and Venezuela (Nwabuzor, 2005). Corruption is endemic as well as an enemy within (Agbu, 2003). It is a canker worm that has eaten deep in the fabric of the country and had stunted growth in all sectors (Economic and Financial Crime Commission (EFCC), 2005). It has been the primary reason behind the country difficulties in developing fast (Independent Corrupt Practices Commission (ICPC), 2006). This is evident in Transparency International’s has consistent rating of Nigeria as one of the top three most corrupt countries in the world (Ribadu, 2003). As part of effort at fighting corruption and strengthening the economy, Nigeria embarked on an aggressive pursuit of economic reform that through privatization, banking sector reform, anticorruption campaigns and establishment of clear and transparent fiscal standards since 1999. The major aim of the economic reforms in Nigeria is to provide a conducive environment for private investment (African economic outlook, 2006). The reform process has the following key 3 pillars: improved macroeconomic management, reform of the financial sector, institutional reforms, privatisation and deregulation, and improvement of the infrastructure. The importance of infrastructure for economic growth and development cannot be overemphasized. The poor state of electricity, transport and communications is a major handicap for doing business in Nigeria. The Federal Government of Nigeria through its Central Bank made progress in consolidation of the banking system which was prior to the reforms was highly fragmented, with many banks having very small and undiversified capitalisation. The reform stipulated a minimum paid-up capital of $188 million, up from $15 million, with a deadline for compliance at the end of December 2005. This resulted in a record number of bank mergers and acquisitions. As a result, the number of banks in Nigeria has shrunk from 89 in 2004 to 25 in December 2005.

The institutions charged to fight corruption in Nigeria have not done enough to contain the upsurge of his this menace up to expectation. Thus, the paper is tempted to ask the following questions: Why have the various anti-corruption agencies of various administrations failed to reduce the menace of corruption? Are the methods applied to confront corruption inadequate? Can the present anti-corruption commission (EFCC) effectively confront corruption as a step to the consolidation of democracy? Lastly, does the role played by the EFCC justify why it was established?

It is against this background that this study seeks to investigate the implication of Economic and Financial Crimes Commission (EFCC) and corruption on the consolidation of democracy and sustainable development and growth in Nigeria from 2004-2008.