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2007 AEC - Effects of Corruption and Economic Reforms on Economic Growth and Development: Lessons from Nigeria


This paper gives an overview of the Nigeria’s recent experience on corruption in the context of economic reforms programme. It discusses the possible causes and effects of corruption, which are seen to be rooted in socio-cultural practices and the political and economic situation of the country. Data were drawn chiefly from news stories, reports of tribunals and commissions of enquiry, interviews of Nigerians with relevant information, anecdotes, and personal knowledge of Nigeria. The results of the study show that there have been significant reductions in the level of corruption in the country through the introduction of government anti-corruption instruments. In addition, this study found a negative correlation between levels of corruption and economic growth thereby making it difficult for Nigeria to develop fast. In Nigeria, corruptions stifle economic growth; reduce economic efficiency and development despite the enormous resources in the country. Corruption creates negative national image and loss of much needed revenue. It devalues the quality of human life, robs schools, agricultural sectors, hospital and welfare services of funds. It discourages foreign investments leading to decrease in Foreign Direct Investment. It exacerbates inequality, desecrates the rule of law and undermines the legitimacy and stability of democratic regimes. It slows down administrative processes thereby making the implementation of government reforms policies ineffective. People engage in corrupt practices in Nigeria as a result of high level of poverty, high unemployment rate, under-remuneration of workers, financial hardship, persuasion by friends and colleagues in public offices, desire to please kinsmen, late payment of contractors by government, over-concentration of power and resources at the center, unregulated informal economy, nepotism, tribalism in the administration of justice and lack of honest leaders. The biggest challenge for the country therefore is not just to punish corrupt behaviour or go into bargaining plea. The country must reverse the prevailing culture in which corruption is viewed as permissible. People should be educated on the dangers of excessive materialism and the culture of ‘get rich quick’. There is also the need for more job creation with better remuneration.

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