The high and increasing rate of corruption in Nigeria is so alarming that it should be a major concern of any efficient and effective government, however that is not the case, This supports the conclusion of Mathew et al (2013) that the unchecked awarding of white elephant projects, execution of second best projects and abandonment projects after huge sum of money would have been paid to the contractors are some of the corruptions resulting from the negligence of the government. . Unfortunately, the political class saddled with the responsibility of directing the affairs of the country have been the major culprit in perpetrating this act (Clement and Obiakor, 2015). Corruption has proven to be a very dangerous parasite, which Nigeria is plagued with and as such, is preventing the economic progress of the country.
The diversion of public resources through the inflation of contracts means that fewer projects will be executed, or as seen in the case of Nigeria, little or no projects are ever completed, as abandonment of public projects has become the deal of the day. The loss of government revenue as a resu1t of corrupt practices implies that, there will be a shortage in resources that can be invested, this impedes economic growth and development.
Amanyi (2015) states that, the more worrisome of aspect of corruption in Nigeria is that, usually, the proceeds of corrupt practices are not usually invested to provide employment, but rather, such money is spent on luxurious items of consumption.
She further concluded that, governments that are perceived to be corrupt usually lack cooperation that can promote development. And at the multilateral level, global financial institutions such as the World Bank are usually unwilling to either release credit or recommend such country for financial assistance from regional groups, at the bilateral level, such country is denied development aid. This was the situation Nigeria found herself until the country was perceived to have adopted anti -corruption policy measures.
In considering the major causes of corruption in Nigeria, the weak prosecutorial institutions are to be blamed, meanwhile when considering the causes of lack of sustainable development and adamant poverty in Nigeria, bad leadership is to be blamed. (Anyanwu, 2002; Idomeh, 2006) as cited in Odi (2014), concluded that, corruption made itself evident when the institution of the government was founded, due the behavior of people appointed or elected to manage the government institutions. Transparency international (2005), as seen in Odi(2014) opined that “corruption is one of the greatest challenges of the contemporary world which undermines good government, fundamentally distorts public policy which leads to the misallocation of resources, harms private sector development and as well hurts the poor”.
2.0 LITERATURE REVIEW
This chapter contains the assessment of available literature relating to corruption and economic development in Nigeria. It is made up of the conceptual review, theoretical review, empirical review, and statement of gaps encountered.
The conceptual review consists of the definition of key words of this study, including corruption and economic development. It will make conceptual distinctions and organize the ideas of various researchers.
The theoretical review involves the search for existing theories that can assist in holding or supporting the general idea of the research study.
The empirical review will consist of the analysis and critic of existing literature relating to corruption and economic development
2.1 Conceptual review
The issue of corruption has attracted the interests of quite a number of various passionate individuals, and so, the researchers are constantly attempting to establish facts on this issue. This disturbing, but yet unending scourge is a global issue and so, lacks a uniform definition. The following are definitions of key words that will be regularly referred to in this study.
Corruption can be defined as the misuse of public power and resources for selfish reasons. It involves the illegal syphoning of public resources, due to privileged access public revenue and power.
Salisu (2000) stated corruption as the abuse of public office for private gain, in such a situation, public office is abused for private gain when an official accepts edicts or extorts a bribe. The abuse of public office can also be said to occur for personal benefits even if no bribery occurs through patronage and nepotism, the theft of state assets or the diversion of state revenue.
Corruption is asking, giving or taking a free gift or favor in exchange for the performance of a legitimate task; the pervasion or obstruction of the performance of such a task or the performance of an illegal and illegitimate task hoarding, collusion, price ?xing, election rigging, abuse and or misuse of of?ce (Ibrahim, 2017).
Essien (2012) defined corruption as a multifarious phenomenon, which cuts across international borders and affects all countries of the world. It affects both the governing and the governed. It is an age-long plague of human societies. Its dimensions, spread, and severity, though tend to exacerbate with advancement in technology and expansion in human societies, vary from country to country.
In the review of the various definitions of corruption, a major similarity established is the fact corruption is the misuse of privilege, it is an illegal act, and as such has negative impacts.
Transparency International (2011) simply defines corruption as the abuse of entrusted power for private gain. It can be classified into: grand, petty and political, depending on the amounts of money lost and the sector where it occurs. Grand corruption consists of deeds, committed at a high level of government, which affects policies, permitting leaders to benefit at the expense of the public good. Petty corruption refers to the regular abuse of delegated power by the low- and mid-level public officials in their interactions with ordinary citizens, while political corruption is a misuse of policies, institutions and laws of procedure in the allocation of resources by political law makers, who misuse their position to prolong power, status and wealth.
Other types of corruption
Bryne (2009) further included systemic, sporadic (individual), legal and moral corruption.
Systemic corruption is a situation where corruption is an integrated and essential aspect of the economic, social and political system, when it is embedded in a wider situation that helps sustain it. Systemic corruption is a case in which the major institutions and processes of the state are routinely dominated and used by corrupt individuals and groups, and in which most people have no alternatives to dealing with corrupt officials. Examples might include contemporary Bangladesh, Nigeria, Kenya and many others.
Sporadic (individual) corruption is the opposite of systemic corruption. Sporadic corruption occurs irregularly and so it does not threaten the mechanisms of control nor the economy. It is not crippling, but it can seriously undermine morale and sap the economy of resources.
Legal and moral corruption is an approach of corruption, where the law is clearly broken. This requires that all laws must be precisely stated, leaving no doubts about their meaning and no discretion to the public officials. The legal approach provides a neutral and static method of adjudicating potentially emotive and perception determined concepts of corruption.
Causes of corruption
Sowunmi et al (2010), as cited in Mathew et al (2013), opined that a weak enforcement mechanism (e.g. lack of judicial independence; weak prosecutorial institutions) is one of the major causes of corruption in Nigeria.
Johnston (1997) in Mathew et al (2013), stated that, weak political competition is a strong factor that helps to encourage corrupt practices and so, the study submitted that a stronger political and economic competition will improve accountability, and open up better alternatives to dealing with corrupt networks.
Why corruption is such an issue: Mathew et al (2013) opined that, corruption, be it any type or called by any name must be seriously identified, understood and tackled. Hence, the economy stands the possibility of stagnancy and retrogression. The study further insisted that, the persistency of corruption erodes the social economic value of a nation, therefore, reforming public institutions and government policies is essential, but poverty, a product of corruption limits the available options.
Nature of corruption in Nigeria
Political corruption is a persistent phenomenon in Nigeria. The rise of public administration and the discovery of oil and natural gas are two major events believed to have led to the sustained increase in the incidence of corrupt practices in the country (storey report, 2014 as stated in mike, 2018).
In year 1996, transparency international began carrying out a survey on the corruption level and corruption rank of Nigeria, and there were a total of 52 countries included in the survey that year, some of which are; Japan, Rwanda, Ghana, South Africa, Croatia, United Kingdom, Senegal, Zambia, India, Venezuela, and Moldova. At the end of the ranking, Nigeria was seen as the most corrupt in that ranking because the country occupied the 52nd position in terms of transparency. Nigeria was the most corrupt country in the year 1996. This period falls within the administration of late general Sani Abacha (Nov 1993 – June 1998). The death of the general Sani Abacha revealed the global nature of bribery. French investigations of bribes paid to government officials to ease the award of a gas plant construction in Nigeria revealed the level of official bribery in the country. The investigations led to the freezing of accounts containing about $100 million (Igbikiowubo, 2004). And in this period between 1996 and 1998 Nigeria’s CPI had risen from 6.9 to 19 in the last year of Abacha’s administration.
The next administration was that of General Abdusalami (June 1998 – May 1999). His government was short and focused on transiting the country quickly to democracy, in this period Nigeria’s CPI fell visibly from 19 to 16.
Olusegun Obasanjo’s administration lasted 8 years (May 1999 – May 2007) and as such, the impact of his administration the Nigerian economy was significant. Corruption prospered massively in his tenure, His bank account grew from twenty thousand naira after emerging from prison to being a multi- billionaire with choice properties in different parts of the world (Japa, 2015).
Late President Yar’adua’s tenure (2007 – 2010) was according to Japa (2015), a quiet, reserved, and noiseless tenure. But due to perpetual ill-health was unable to tame corruption which is the character and perfume of his party men and women in the PDP. And as such, the Nations CPI between years 2007 and 2010 was on an increase. And ever since then corruption has been on increasing rate, as Nigeria’s corruption perception index never fell below 24.
Ebele Goodluck Jonathan’s tenure (2010 – 2015): In 2014, Nigeria’s rank improved from 143rd to the 136th position on Transparency International’s Corruption Perceptions Index. Former president Goodluck Jonathan’s government had several running scandals including the purchase of a BMW by his Aviation Minister worth $250 million plus, security contracts to militants in the Niger Delta, massive corruption and kickbacks in the Ministry of Petroleum, the Malibu Oil International scandal, and various scandals involving the Petroleum Ministry including accusations of sweetheart deals with select fronts and business people to divert public wealth. In the dying days of Goodluck Jonathan’s administration, the Central Bank scandal of cash tripping of mutilated notes also broke out, where it was revealed that in a four-day period, 8 billion naira was stolen directly by low-level workers in the CBN.
Economic development refers to the improvement in an economy regarding standard of living and advancement of the production process with respect to technology.
According to the business dictionary(2018), economic development is the progress in an economy, or the qualitative measure of this. Economic development usually refers to the adoption of new technologies, transition from agriculture-based to industry-based economy, and general improvement in living standards.
Jacob (2013) stated that development is a multi-dimensional process that normally connotes change from less, to a more desirable state. Ujo (1995:5) as cited in Jacob (2013), that, development is beyond economic indicators. The study insisted that development is both a physical process and a state of mind. The transformation of institution is the physical aspect, and development as a state of mind insists that the thinking of the people must change.