THE IMPACT OF CORRUPTION ON NIGERIA ECONOMIC DEVELOPMENT
ABSTRACT
    This study was motivated by the high rate of corruption in Nigeria. The purpose of this study is to find out the impact of corruption and the strategy to reduce it. Chapter one dealt with the background of the study, purpose of the study significance of the study and statement of problems. Chapter two dealt with the review of past literature on the subject matter, chapter three dealt with method of data collection. Chapter four dealt with the analysis of data collected and discussion of findings while chapter five dealt with the summary, conclusion and recommendations based on the findings as a result of research work. The findings were that corruption is caused of many factors in Nigeria, such as, unemployment, bad government, lack of basic social   amenities etc and that if proper action is taken, corruption will be greatly reduced.
TABLE OF CONTENT
CHAPTER ONE
1.1.    Background of the Study                
Statement of Problem                
1.3    Research Question                    
1.4.    Objective of the Study                    
1.5.    The Scope of Study            
CHAPTER TWO: LITERATURE REVIEW
2.1    Literature Review            
2.2    Concept of Corruption                     
2.3    Theories of Corruption            
2.4    Approaches to the Elimination of Corruption
CHAPTER THREE
3.1     Methodology                
3.2     Design of Study                
3.3     Population                        
3.4     Research Instrument            
3.5     Procedure for Data Collection        
3.6.     Administration of Questionnaire            
3.7.     Population Sampling            
3.8.     Method of Data Collection        
3.9. Method of Data Analysis        
CHAPTER FOUR
4.1    Data Analysis and Interpretation            
4.2     Characteristics of Study Population    
4.3    Discussion of Findings                
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
Summary                 
Conclusion        
5.3      Recommendations             
Bibliography                        
Appendix                             
CHAPTER ONE
INTRODUCTION
Unarguably, corruption is one of the greatest threats to the economic and development of any nation. Observers insist that the fight against corruption in Nigeria has remained a major challenge facing successive administrations. They stress that Nigeria has been rated low in the fight against corruption, citing a report of Transparency International which indicates that the country currently occupies 144th position in the global corruption ranking. The concerned observers concede that although Nigeria has made some efforts to tackle the menace in the past, very little achievement has been recorded. They also note that delays in the movement of files in offices, extortion by law enforcement or traffic officers, queues at passport offices and filling stations, the ghost workers’ syndrome and election irregularities, among others, are some instances of corruption. They are of the view that the success of the war against corruption in Nigeria largely depends on the input of all Nigerians. Corruption does not involve just people in government, but also to people in both private and public positions and even traditional rulers. Within the educational sector in Nigeria, especially from secondary to university levels, corruption is very pervasive, and most of which is not in the public eye. Parents are known to have used unorthodox means to influence their children's or wards' admission to federal government secondary schools, commonly referred to as unity schools. A high JAMB score is critical for admission in to the university in Nigeria, and this has led to cheating by some students and parents. There are expensive coaching centers that charge exorbitant fees to guarantee a minimum score of 300 in the JAMB score, which is been orchestrated by coaching centers through aiding and abetting cheating in the JAMB examination with the connivance of JAMB officials.
It has been alleged that some unscrupulous officers rent firearms to criminals who use them to harass the public and engage in highway robberies.  The police are also alleged to be collecting an unauthorized fee before granting bail to anyone who is arrested. Some police in traffic control collect a graduated illegal charge on all operators of inter- and intra-city. Some tax officials are alleged to be using two types of receipts to collect revenue. Once receipt is the original, and hence genuine, while the second is usually a false one for the collectors private use, thus depriving government of its legitimate revenue. Corruption has no uniform definition. This is so because what is regarded as corruption depends on the actors, the profiteers, initiators, how and where it takes place. It also depends on the existing laws and regulations guiding certain actions. Some countries define corruption in the broadest form while others legislated on the narrow definition of the term. The social and cultural contexts and the time dimensions also make a unique definition difficult. There are also levels of corrupt practices. As a result of the fluidity and the evolving nature of the concept, the United Nations (UN) has adopted a descriptive approach and criminalization of the act to describe what act is corrupt. The UN clearly highlighted bribery, embezzlement, illicit enrichment, abuse of office, laundering of proceeds of corruption, obstruction of justice, etc, as corrupt acts. The World Bank (1997) defines corruption as “the abuse of public power for private benefit”. The Transparency International (TI) defined it as “the abuse of entrusted power for private gain”. Mushtaq Khan (1996) views corruption as the “behaviour that deviates from the formal rules of conduct governing the action of someone in position of public authority because of private motives such as wealth, power or status”. The Independent Corrupt Practices Commission (ICPC) Act, 2000, defines corrupt acts to include “bribery, fraud and other related offences”. The Vision 2010 Committee defines corruption as “all those improper actions or transactions aimed at changing the normal course of events, judgments and position of trust”. In effect, the motivation for corruption is to take undue advantage of position of trust which is not limited to pecuniary issues. It is also not limited to the public sector. The act is criminal when considered along with the existing legislations on the subject in Nigeria. Corruption is a social problem that has interested many scholars. Ruzindana (1999) asserts that corruption in Africa is a problem of routine deviation from established standards and norms by public officials and parties with whom they interact. He also identified the types of corruption in Africa as bribery, private gain, and other benefits to non-existent workers and pensioners (called ghost workers). The dishonest and illegal behavior exhibited especially by people in authority for their personal gain is corruption. According to the ICPC Act (section 2), corruption includes vices like bribery, fraud, and other related offences. Corruption is the abuse or misuse of power or position of trust for personal or group benefit (monetary or otherwise). Corruption is a symptom of numerous difficulties within contemporary societies. It usually involves more than one party. It takes a form of an organized crime. At times, an organization can be established on corruption to beget corruption. Gbenga (2008) asserts that corruption is contagious. According to the perception index of Transparency International, Nigeria was ranked 144th out of the 146 countries, beating Bangladesh and Haiti to last position. An analysis of the anti-graft/anti-corruption laws in Nigeria shows that corruption will continue in spite of the laws because the perpetrators do not fear any consequences. It is now dawning on the Nigerian public that the so-called private enterprise and legislators are free from scrutiny, and governors claim to be immune. Corruption is found in the award of contracts, promotion of staff, dispensation of justice, and misuse of public offices, positions, and privileges, embezzlement of public funds, public books, publications, documents, valuable security, and accounts. Corruption can be systematic in nature and affect the whole life of an organization or society.
THE IMPACT OF CORRUPTION ON NIGERIA’S ECONOMIC DEVELOPMENT
High prices to consumers
When entrepreneurs and businessmen are required to pay bribes before necessary permits are issued, they tend to view it as a cost of doing business and therefore pass that cost onto consumers (that is you and me) who suffer from high prices. Thus for example when a Ghanaian businessman goes to Tema Harbour to take delivery of goods, all the bribes that are paid may be tacked onto the final price they would charge consumers.
In those instances where businesses refuse to pay “speed money” or grease the palms of bureaucrats, they are subjected to delays and frustration. Again, these frustrations increase the cost of doing business and are passed onto the consumer in the form of higher prices.
Reduced investment leads to reduced goods and services and inflation
In extreme cases, the extortion of bribes from entrepreneurs can be seen as a tax which can reduce the incentive to invest. Foreign entrepreneurs for example will shy away from corrupt countries because they claim the cost of doing business is too high when one factors in the bribes. Reduced investment leads to reduced goods and services, a concomitant reduction in gross domestic product and inflation. Imports is one way to deal with shortfalls in local production but that unfortunately puts pressure on Ghana’s foreign exchange reserves and balance of payments.
Reduced commitments from donor agencies
Corruption reduces the effectiveness of aid flows through the diversion of funds from their intended projects. Like many other developing countries Ghana benefits tremendously from aid inflows from donor agencies such as UNICEF, UNESCO, USAID etc. but increasingly these agencies are now concerned that their aid fosters sustainable development and not end up in the pockets of corrupt government officials or finance unproductive public expenditure. The agencies are therefore focused increasingly on issues of good governance and in those cases of poor governance; some donors have scaled back their assistance. Recently The US State Department has indicated that corruption in Ghana is on the ascendency and no serious efforts are being made to stop this danger for society.
Reduced foreign direct investment
According to World Bank Development (1997), FDI may still flow to countries in which corruption is systemic but only if bribery is affordable and results are predictable. Corruption can have a negative effect on foreign investment because for most foreign firms corruption is a cost of doing business to be recouped from revenues. Consequently if the costs become too high or unpredictable, they disengage or shun the country altogether. High levels of corruption add to the risk of Ghana being marginalized in the international economy.
Reduced tax revenues
Corruption also brings about loss of tax revenue when it takes the form of tax evasion or the improper use of discretionary tax exemptions. The centerpiece of Anas work was to show how the corruption was depriving the Ghana government of much needed tax revenue. There are the familiar stories of tax officers receiving bribes and looking the other way as tax evasion runs rampant.
Government’s inability to finance budget expenditures -Deficit Financing
By affecting tax collection, corruption has adverse budgetary consequences. Tax revenue is used to finance budget expenditures, therefore with reduced tax revenues; the revenue section of the national budget is reduced, resulting in adverse budgetary consequences. Revenue shortfalls lead to budget deficits which have the following deleterious economic effects:
Savings that could be productively invested is absorbed by the deficit.
B)     Borrowings to meet the deficits leaves higher interest obligation for future generations.
C) Government’s ability to respond to legitimate economic concerns with social and economic programs becomes hampered leading to reductions in standard of living.
Inferior public infrastructure
The allocation of public procurement contracts through a corrupt system leads to inferior public infrastructure and services. For example corrupt bureaucrats might allow the use of cheap sub-standard materials in the construction of buildings or bridges. When corrupt politicians influence the approval of an investment project, the rate of return as calculated by cost benefit analysis ceases to be the criterion for project selection. Consequently, the selected projects are not selected on merit but because of cronyism and patronage. These projects are sometimes never completed because of exorbitant upfront bribes eroding the operating capital. In other instances these projects are completed but never used because they are so poorly built that they will need continuous repairs and their output will be disappointing. In these circumstances, capital spending fails to generate economic growth.
Poor maintenance of public infrastructure
Because of corruption, maintenance and repairs always takes a back seat to new projects. For fear of being exposed, corrupt officials prefer to approve new projects rather than spend to revamp the old corrupt projects they approved in the first place. The result is that new projects are constantly being undertaken whilst existing infrastructure is left to deteriorate.
Corruption leads to uncertainty in economic transactions
The prevalence of corruption arguably influences the economic environment through the creation of significantly higher levels of risks and uncertainty in economic transactions. Uncertainty is present both in the context of individual economic transactions and in terms of heightened fears about future developments in the broader economic environment. This fear and uncertainty translates to reduced business growth and reduced gross domestic product.
Corruption reduces Investment and Economic Growth
Finally empirical research and regression analysis indicates that the amount of corruption is negatively linked to the level of investment and economic growth, that is to say, the more corruption, the less investment and the less economic growth. Analysis further shows that if the corruption index improves by one standard deviation  (equal to 2.38 in this case--a standard deviation measures variation from the "normal" index), the investment rate increases by more than 4 percentage points and the annual growth rate of per capita GDP increases by over a half percentage point. In effect, a country that improves its standing on the corruption index from, say, 6 to 8 (recall that 0 is most corrupt, 10 least), will enjoy the benefits of an increase of 4 percentage points of investment, with consequent improvement in employment and economic growth.
1.2    BACKGROUND OF THE STUDY
The negative consequence of the endemic corruption continues to impede development and threaten security of lives of the citizenry. Poverty, unemployment, insecurity of life and property and decaying infrastructure are the common features which are  largely attributable to the high incidence of corruption which has reached an endemic  level.  
1.3    STATEMENT OF PROBLEM
The statement of problem in this research work deal with the impact of corruption and the causes and effect it has to the common man in Nigeria.
In this work we shall be examining the nature of corruption in Nigeria which has motivated this researcher to try to find solution to this problem. The problem of corruption is not only on government  officials or public office holder but also affect the political development of the country. With this research we shall therefore examining this issues. The reason why this researcher is writing this research is to examining the impact of corruption on the political development of Nigeria.
1.4    RESEARCH QUESTION
Can employment reduce the level of corruption in Nigeria
Can public enlightenment checkmate the menace of corruption in Nigeria?
Can the provision of social amenities stop the increase in the poor living conditions of Nigerias?
Can government intervention and other organizations through the creation of jobs and small scale industries for youth employment bring down the rate of crime and unemployment, corruption and corrupt practices.
Can lack of good governance be the causes of corruption in Nigeria?
1.5.    OBJECTIVE OF THE STUDY
This research is to study the impact of corruption on Nigeria’s economic development. This is done with the aim of identifying the implication of corruption on the nation’s economic growth and development.
The findings of this study will be recommended to the government and policy makers for the purpose of putting in place structures that may lead to the eradication of corrupt practices so as to economically enhance the growth and development of Nigeria.
1.6.    THE SCOPE OF STUDY
This study is based on the impact of corruption on Nigeria’s National development. To review the dimensions of corruption in Nigeria and its implications for political development using the National Orientation Agency as case study.
1.7    SIGNIFICANCE OF THE STUDY
This work is to stimulate honesty and hard work and to draw attention to government on the impact of corruption among Nigerians both in t he public and private sector. To bring to light the basic roles in which government should play in other to reduce poverty.
This study also looks at the roles in which the national orientation agency has played in making sure the government and the general public are aware of the damage of corruption.
This study finally, brings to the knowledge of government the need for accountability and provision of responsible and good governance for the country and also for government to make an effort to improve the living condition of her citizens.  
1.8    DEFINITION OF TERMS
There are not much ambiguous terms used in this work, but some of them are as follows corruption: this is act of not being accountable for money spent especially in government.