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Tella Department of Economics Olabisi Onabanjo University Ago-Iwoye, Ogun State And Centre for Applied Economics and Policy Studies (CEAPEPS) Ijebu-Ode, Ogun State. Email: firstname.lastname@example.org BISMILLAHI RAHAMANI RAHEEEM PROTOCOL And do not devour your wealth among yourselves through falsehood and offer it not as bribe to the authorities that you may knowingly devour a part of the wealth of other people with injustice. (Quran 2:188) When bribery and fornication appear in a community, the people of that community has rendered themselves liable to the punishment of Allah. The Holy Prophet 1. Introduction
It is with great humility and subservient to the will of Almighty Allah that I accepted to be part of this year‟s Independence Anniversary Lecture organised by The Muslim Congress. I am very grateful to the leadership of the Congress for considering me worthy of presenting a paper on this topical issue that is drawing Nigeria back on the development front. The issues of corruption is quite topical any day around the world and its relations or effects on economic development will continue to confront society so long as we desire better living conditions. Corruption is so important to the existence of Nigeria that hardly would it not be mentioned in the media each day. This is why I consider the topic as very important and apt for this particular period in the existence of our nation. In fact, the depth of corruption in Nigeria seems to be growing in the same direction with underdevelopment characterised by rising level of unemployment, poverty, insecurity and national decay every month and year. This trend in relationship should not be surprising as a number of studies have been carried out to confirm such situation. The Secretary General of the United Nations, Ban Ki-Moon said recently: Neither peace, development nor human rights can flourish in an atmosphere of corruption! The kernel of this paper is to identify the cost of corruption and this is carried out by reviewing various international reports on the state of Nigeria‟s economy within comity of nations. The rest of this paper is divided into four sections. In the next section, we look at
Lecture presented at the 2012 Independent Day Lecture organized by The Muslim Congress (TMC) in MKO Abiola International Stadium, Abeokuta on October 6 , 2012.
b. court decisions awarding damages in excess of any injury suffered. misappropriation of assets. The briber could be a Mafia group or a large corporation that dominates the State. Under the Bilateral Monopoly State. That is. payment of ghost workers and pensioners. purchase of goods at inflated prices. Here. Ruzindana (1997) identifies the following forms of corruption that people engage in: bribery. illegal use of public assets for private use. extortion. In kleptocracy States. they may not be able to prevent them from taking bribes (Coolidge and RoseAckerman. Let us briefly discuss these2. The Mafia may be powerful but organisation of the corruption may limit its ability to purchase the benefit it wants. such rulers tend to favour an excessively large state to maximize their rent seeking opportunities.1. The corruption of some officials can encourage 2 See details in Rose-Ackerman.some conceptual literature on corruption while in Section 3. who in a large number of cases in developing countries. In section 4 we consider effects or cost of corruption on Nigeria and present concluding remarks and recommendations in Section 5. the corrupt ruler faces a single major briber. bilateral monopoly states. 1997a. corruption is entrenched at the highest level of government. In pure kleptocracy. is a multinational corporation. 2 . the State may become an appendage of the large investor. A fundamental problem in this case is the potential for an upward spiral of corruption. 1993). This is because reaching an agreement with one official does not preclude another official from coming forward. 1997). removal of document or even complete case file. Rose-Ackerman (1997) identifies four stylized types of corrupt states viz: Kleptocracy. The Competitive-bribery State is one of loose relationship. rulers form an alliance with a Mafia group that engages in crime to provide protective services that in ordinary societies are provided by the State (Gambetta. the head of government runs the political system in such a way that it maximizes the possibilities for extracting rents and relocates the resultant benefit for personal aggrandizement. many corrupt officials deal with a large number of ordinary citizens and firms. payment for goods not supplied or services not rendered which is called “air supply”. The relative share of the gains expropriated from their collusion will depend on the relative strength of the actors. 2004. Depending on the strength of the two actors. mafia-dominated states and competitive-bribery states. fraud and embezzlement.and underinvoicing. the ruler and the briber. In the Mafia-dominated State. and redtapism and patronage. incurring distributive and efficiency losses as well as forfeiting the ability to tap the profits of economic activities. Sometimes. many officials are engaged in freelance bribery and they face a monopolist briber in the private sector. While they prefer to avoid waste by their subordinates. Tella. over. Conceptual Issues on Corruption Corruption appears in many forms such that the tendency is to overlook some activities as normal and legal. a review of studies on effects of corruption on a nation. with the former using the State‟s apparatus and his position to intimidate the latter who can also threaten to engage in violence (Rose-Ackerman. In some bilateral monopolies. 1997). 2. underpayment of taxes and duties on exports or inputs through false declaration or invoicing.
2011). it moves down the ladder so rapidly that it becomes an endemic disease that only a revolution. 1974. A number of reasons have been adduced for the failure of the Nigerian governments to implement sound economic and social policies that can develop the economy. 3 . with all its human and non-human wealth remains a proud member of the group. The situation has not changed more than 15 years after! It has even worsen. Such level of corruption requires more than spirituality for the society to survive. In fact. The reasons include3: The first major reason is deep-seated corruption by those in power and with the active collaboration of some international organisations and institutions. Nigeria is often referred to as the number two economy in Africa after South Africa but that is in terms of nominal gross domestic product (GDP) which is largely influenced by price and volume of crude oil not in terms of meeting basic needs and other development indices. When corruption is allowed to thrive uncontrollably at the top. can cleanse the society and lead them to better living condition. 4. Whichever type of corruption. There is hardly a day without a report on corruption in the Nigerian newspapers. This is why the World Bank assessment report on Nigeria in 1996 was titled “Nigeria: Poverty in the Midst of Plenty”.others to accept bribes until all but the reconstructed moralists are corrupt (Rose-Ackerman. While countries like Botswana and Equatorial Guinea have existed from Least Developed Countries status. and weak monitoring of subordinates. and Deliberate promotion of importation of goods that can be produce locally with a view to engaging in capital flight and money laundering in a somewhat more legal manner than money laundering which in itself is corruption. Nigeria and Corruption: Facets and Costs 4. (2004) Accountability and Transparency in Governance:…. such society deceive itself by promoting religious bigotry which in essence sometime serves as another avenue for exploitation without light at the end of the tunnel (Tella. devoid of morality. Nigeria. Deliberate pauperization of the populace as a weapon for oppression and exploitation. reduction in expected punishment for offences committed are all part of corruption and therefore further promotes commitment to such offences (Becker and Stigler. low compensation for work done. Lack of openness or accountability and transparency in the conduct of government businesses which invariably spill-over to the activities in the private sector. Klitgaard. Facets of Corruption in Nigeria Nigeria is reputed to have huge human and non-human resources with the potential to become a force to be reckoned with within the comity of nations. Below are samples of newspaper headlines to buttress this statement: 3 See Tella. such as the current minimum wage palaver. 1991).A. 1997a). S.1.
29 million was spent on same last year) 11 Rehabilitation of the banquet hall dome roof (N81 million allocated to same last year) 12 13 Feeding for President and Vice-President New Presidential jet N62. 2012: “Failure to Prosecute Okupe. The Nation. “Zambia probes Nigeria firm for $5m oil swindle”. 2012: “Subsidy payments: Oil marketers may sue Federal Government – Govt lied over N259bn payments”.50 million N512. P. Punch. p. p. Punch. endorsement of corruption – ACN”. 13.87 million 127. Sunday. Saturday. The Punch. Prado and Land Cruiser) at N10 million each and accessories for the vehicles at a cost of N25 million 250 million 4 5 6 7 8. Abuja (N101 million was allocated for same last year) 9 Rehabilitate the State House and Dodan Barracks (N628.57 million N52. Even in budgetary allocations. September 4. p. 2012: “ID card: French firm fined N94. 10 jeeps (assorted Range Rover.10.73 million N530. Wednesday.35 million N101.67 million 280 million 356. The Nation. 2012.1. p. 2012: “400b oil money mismanaged by government.57 million US$110 million N357. The Nation.39 million N385.64 million spent earlier on the two facilities) 10 Repairs and renovation of the administrative building at the Villa (N302. Thursday. September 2. Friday.23 million N992. September 6. p. 21. 2012: “Appeal Court asked to nullify proceedings in $15m Ibori bribe money”. says Ezekwesili”.72 million Budget Proposal 4 . Monday. Tuesday.2m for bribing Nigerian officials”. 2012. September 1.10. Overhaul power generating set Refurbishment of family wing of the main residence Land reclamation at the State House Medical Centre Rehabilitation of transformer substation in the Villa Rehabilitation of 10 presidential houses on Ibrahim Taiwo Street. “Alleged N1b Pension Fraud: EFCC seizes passport of Kaduna oil baroness”. September 5. The Punch.5. September 3. September 7. the country‟s administration demonstrates profligacy bordering on corruption of the highest order. The table below on 2012 federal budget shows this: S/N 1 Description of Item Two bullet proof Mercedes Benz saloon 600 E Guard at N140 million each 2 3 New vehicles in the presidential fleet 5 Mercedes Benz 350 (semi plain/partial bullet proof) at N25 million each.2. p.
distort fundamental role of government and undermines the legitimacy of government and of the market economy. the people of that community has rendered themselves liable to the punishment of Allah.Source: National Association of Nigerian Traders (2012) The implication of the above examples is that corruption and profligacy have become part and parcel of the Nigerian lives. Iraq. the incidence of poverty was growing in both Africa and Asian LDCs but the trend has since changed. A United Nations Conference on Trade and Development (UNCTAD) Report (2010) on Less Developed Countries (LDCs) indicates that in 1980s to mid-1990s. reduces expenditures for education and health. 4. political instability and other major problems. increases child and infant mortality rates. it is instructive to note that most of the decline in poverty occurred in Asia. Benin beating us! This implies that Nigeria is number 27 and 20 from below within the world and with Africa respectively. With a World Bank‟s report (2010) showing that extreme poverty fell from 53 percent in 1990 to 33 percent in 2005 in LDCs. corruption and insecurity. Sclҫuk (2006) affirms that corruption reduces economic growth. It is within the context that Nigeria has been liable to the punishment of Allah that we look at the cost or consequence of corruption on the Nigerian economy. The major reasons given for the parlous state of Nigeria in ranking are growing unemployment. as being worse than Nigeria. Mali. Somalia. If we look at the countries that we „lead‟ in the failed state ranking. a country cannot expect meaningful development. extreme poverty continued to rise in Africa while the trend reached a plateau in the Asian countries in 2000. enhances inflation. constituting large proportion of the population in Africa is one of the driving forces in poverty aggravation in Africa. As if to confirm the punishment of Allah on corruption. How do you categorize Nigeria with Pakistan. When the report of the Fund For Peace (FFP) for 2012 was released. Nigeria ranks 145 out of 172 countries in the world and ranks 32 position out of the 52 African States with countries like Ghana. In the 2010 United Nations Development Programme (UNDP) Report on Human Development Index. With the glaring misallocation of resources. Cameroon. Haiti. 5 . Consequences or Cost of Corruption The consequences or cost of corruption can be gleaned from one of the word of the Holy Prophet quoted at the top of the paper: When bribery and fornication appear in a community.2. increases income inequality and poverty. natural disasters. we would see that they are countries have been involved in civil wars. retards long-term foreign and domestic investments. increases military expenditures. even those in Africa. depreciates national currency. The UNCTAD report states that during the boom period around the world. and Cote dÍvoire who have in recent past or presently suffered from the aforementioned malady but that is where we are! You cannot see any oil exporting country. Nigeria. reduces tax revenue. misallocate talent to rent seeking activities. Nigeria was ranked as one of the top 10 failed states in Africa and 14th in the world.
Nigeria belongs to the LHD and ranks 142 out of 169 countries in multidimensional poverty index (MPI) and is behind African countries like Gabon. It is clear from the table to see that Nigeria is worse off in all the indices. Eight goals were identified for meeting such needs by the year 2015. While other countries are making progress in education. The report indicates that the factors that are instrumental to Nigeria‟s progress are improved macroeconomic conditions. 161-163). eliminate gender inequality. tuberculosis and malaria. achieve universal primary education. countries are divided into five groups namely Very High Human Development (VHHD). 2012 SubSaharan Africa -54 76 22 61 62 100 104 95 Lower middle income countries -65 50 25 87 71 107 110 104 In the Statistical Annex of Human Development Report of 2010 (pp. The average life expectancy for Africa is 54 years and that of other countries within our income group within the world income bracket is 65 while Nigeria‟s figure is 51. Low Human Development (LHD) and Other Countries or Territories. Cape Verde. Nigeria: Poverty and social Indicators Nigeria Item (Average for 2004-2010) Poverty (% of population below national poverty 55 line) Life expectancy at birth (years) 51 Infant mortality (per 1. reverse the loss of natural resources and biodiversity.000 live birth) 88 Child malnutrition (% of children under 5) 27 Access to an improved water source (% of 58 population) Literacy (% of population age 15+) 61 Gross primary enrollment (% of school age 83 population) Male 87 Female 79 Source: Development Economics LDB Database. Although the country‟s position has improved from127 last year but it is still behind such countries like South Africa. a recovering financial sector and efficient use of talents while it is held back by corruption. government inefficiencies and worsening insecurity. Ghana and Cameroun. reduce hunger. These are targets to increase incomes. and establish effective global partnership. to chart a course of meeting minimum needs of the people of this countries.0 00 birth while the average figure for Sub-Saharan Africa is 76 and income group is 50. Cameroun. Medium Human Development (MHD). Egypt. Congo. reduce maternal and child mortality. sanitation and good housing.The World Economic Forum‟s report on 2012-2013 Global Competitive ranks Nigeria 115th out of 144 countries. The Millennium Development Goals (MDGs) was conceived at the beginning of this century for developing countries. etc. 6 . Reports on the achievements of the MDGs indicate that Nigeria is one of the African countries that will not be able to achieve goals by the terminal date of 2015. improve access to water. Kenya. including Nigeria. Infant mortality in Nigeria is 88 death per 1. we are still lagging behind as also shown in the table. Kenya. High Human Development (HHD). Ghana. Namibia. reverse spread of HIV/AIDS. The table below shows the position of Nigeria vis-à-vis Sub-Saharan Africa and the low middle income countries where Nigeria belongs in world income profile.
7 . ASUU publication.3. that government mismanaged N400 billion oil money. leading to higher costs). or human development indicators consisting of human development. 38 of 1975 which was abrogated by General Obasanjo when he took over after the assassination of Murtala Muhammed. which are the most recent on development clearly show that Nigeria remains underdeveloped despite huge receipts from sale of oil in the last ten years and huge expenditure through budgetary system. 6 National Scholar.2. We should recall the comment by Ezekwesili in Sunday Punch of September 2. education and health. popular participation and human rights. A country so blessed with human and material resources yet so poor! This is what economists call resource curse. Nigeria does not feature either among the top 10 performers either on basic measures for democracy which are rule of law. It enables the resources and 4 5 See Tables 4. including socio-economic rights. National Scholar. poor schools and falling education standards. equipment. foreign exchange earned from exports is not repatriated. the deeper the depth of corruption in the country! Let us conclude this section with Ogbu (2011) who. and Obasanjo‟s “War Against Corruption”. 106 of the Report. national assets are run down and ruined.104 and 4. 4. Corruption disturbs the economy through the waste and misallocation of resources. and the disappearance of foreign aids and foreign loans and of entire projects without a trace (or their delayed completion. The above quotation summarizes the present situation in Nigeria. personal safety. welfare. p. stated inter alia: Corruption has led to bad roads and decaying infrastructure. It turns law enforcement agents into violators of the law.4 The reports above. vehicles and physical and social infrastructure have been paid for repeatedly but never performed. General Muhammadu Buhari came up with “War Against Indicipline” (WAI). p. in concluding his paper on Political Will and War Against Corruption in Nigeria6 wrote: Corruption is the bane of the Nigerian society. It has been there all the while and a number of policy measures. See Toye Olorode (2011) The Political Economy of Corruption in Nigeria. Corruption is an incentive to violate human rights because it enables violators to escape legal sanctions.5 The more the slogan. Policy Measures/Slogans Corruption in Nigeria did not start yesterday. inadequate medical services. ASUU publication. It is a clog in the realization of human rights. General Murtala Muhammed introduced Corrupt Practices Decree No.1. statements and slogans have been introduced over the years towards discouraging corruption as a way of life.In the 2012 Economic Report for Africa by the Economic Commission for Africa. accountability. Ruzindane (1997) when commenting on corruption in Africa (and by extension-Nigeria. Corruption has meant that fewer imported goods enter the country than were paid for. and repairs of buildings. President Shehu Sagari introduced “Ethical Revolution” while General Ibarahim Babangida brought in “Mass Mobilisation for Social and Economic Reconstruction” (MAMSER) which scope include re-orientation toward honest living.
we must insist on transparency and accountability in governance.property of the state to be personalized and privatized. 5. thus depriving the people of their fair share of public property and services. We have the right to demand for an end to kleptocracy if Nigeria is to move forward today and present a better future for generations unborn. It is noted that some empirical results show that though corruption is a worldwide phenomenon but the degree or depth of corruption varies from country to country. One agrees with the opinion that the fight against corruption is a very difficult process and eliminating it is an illusion but adopting “shock therapy” i. Thank you for listening. Ahmeti et al. so also is the effects on economic development. 2012). poverty and insecurity. It debases democracy and turns it into an instrument of enslavement instead of emancipation. 1999. Nigeria remains in a precarious state of development due mainly to corruption.e. The first step might be to carry out quarterly city rallies (like that of January 2012) of 3-day duration in each case as warning strike against corruption until reduction on incidence of corruption in high places is noticed.. rather. that is entrenched in corruption cannot fight the same vice. The deeper the level of corruption the greater the level of unemployment. private organisations and individuals to come together as stakeholders to fashion out how corruption must be tackled headlong within the government circle – Executive. There must be concerted efforts by the Non-governmental Organisations. In addition. This becomes imperative in view of the fact that other African countries that are less endowed are already on the threshold of becoming emerging economies. 8 . These are the symptoms that are staring us in the face in Nigeria today in spite of huge amount of revenue coming in from oil and non-oil sectors in the last twelve years of democracy. Conclusion and Recommendations This paper attempts to show how incidence of rampaging corruption has continue to deprive Nigerians benefits of huge revenues from non-human resources and productivity of human resources that could have resulted in enduring economic development. immediate strike in many front can reduce it (Bishmi. It is in this connection that I am inclined to suggest that ordinary Nigerians should shoulder the responsibility of fighting corruption. it would protect itself by setting up anti-corruption committee as the present government is trying to do. Nigeria‟s state of corruption can be placed within the context of Kleptocratic State where corruption starts from the top and flows down the various strata of the country. The paper concludes that given recent international reports that provide opportunities for comparisons with other countries around the world. Legislative arms and the Judiciary. The same State.
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