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Nigeria Nigeria Presentation Transcript

  • CORRUPTION VS. GOOD GOVERNANCE How International Business Can Improve for Nigeria
  • Plan of Study  Corruption Good Governance  Reputable sources  Primary research  Major NGOs  Transparency International  Global Integrity  World Bank
  • Topic:
  • Nigeria
  • Nigeria Cons Pros  Corruption perceived  Large labor force to be at high levels  Natural resources  Weak policies that (oil) deter investment  Political instability  Coast Line and Ports  Weak infrastructure  String private sector  Complex tax system  Lots of FDI
  • Research Questions  What is corruption and how is Nigeria ranked?  What do businesses consider when deciding to invest in a country?  What have other countries done to combat corruption and improve good governance?
  • Findings: Corruption  State corruption is the misuse or abuse of entrusted power via legislation, mutual understanding or agreement for private gain.  Corruption can involve bribery, embezzlement, extortion, fraud, patron age (nepotism, cronyism), rent seeking and graft
  • Findings: Ranking Nigeria  Different organizations that rank countries on governance and corruption  Transparency International  Global Integrity  World Bank  Nigeria’s ranks and scores are weak
  • Corruption Perceptions Index (CPI)
  • Global Integrity Index Global Integrity Index 2007 90 80 70 60 Overall Score 50 40 30 20 10 0 U C Ec N Le Bu Ta SA os ig ba ua lg nz er ta ar no do an ia R ia n r ia ic a Country
  • Worldwide Governance Indicators (WGI)
  • Findings: What Businesses Look For When Investing in a Country  Ease of doing Getting credit business Protecting  Starting and closing a investors business Paying taxes  Dealing with licenses Trading across borders  Employing workers Enforcing contracts  Registering property
  • Comparative Study  Nigeria  Botswana  Federal Republic  Parliamentary Republic  Independence: 1 Oct. 1960  Independence: 30 Sept. 1966 (from UK) (from UK)  Population Growth Rate: 2.4%  Population Growth Rate: 1.5%  GDP- per capita (PPP): $2,200  GDP- per capita (PPP):  Malaysia $14,700  Constitutional Monarchy  Chile  Independence: 31 Aug. 1957  Republic (from UK)  Independence: 18 Sept. 1810  Population Growth Rate: 1.6% (from Spain)  GDP- per capita (PPP):  Population Growth Rate: 0.9% $14,400  GDP- per capita (PPP): $14,400
  • Research Questions  What are the cultural perceptions of governance?  Do the people feel the government is corrupt?  Do they feel it could do more to attract international investment?  Are the people interested in attracting more FDI?  What do business and international organizations generally define as good governance?  What institutions and policies are necessary for international business and investment?
  • Findings: Cultural Perceptions  Nigerians still perceive their government to be corrupt  Corruption has become an institution, but not a cultural institution  Citizens are not seeing improvements, despite substantial oil revenues  Calling for improvement of basic conditions  Unemployment  Poverty  Infrastructure
  • Findings: Attracting Business  Government has been seeking international investment: China, Libya, India  Many NMCs still unwilling to make risky investment  People and companies seek improvements: infrastructure, transparency, property rights, land use  Trade and imports vs. industry protection  Benefits of FDI
  • Findings: Good Governance  Governance process of making and implementing decisions  Can be applied to all organizations: political institutions; local, national, international governments and corporations  Several organizations and institutions have developed guidelines for good governance
  • Findings: Institutions and Securities Rule of law Accountability Transparency Participation Property Rights Regulation  Common themes among all definitions, applicable to Nigeria, will address the corruption problem as well as stimulate
  • Research Questions  What are the impacts of corruption?  How does corruption affect the investment climate and international business?  What are the economic and social costs of corruption?  What can be quantified?  How far-reaching are the affects of corruption?  What is the economic potential of Nigeria?  Withgood governance, what kind of investment could Nigeria expect to attract?
  • Findings: Impacts of Corruption  Costs higher  Threatens stability  Skews development  Uneven playing field  Harms reputation and trust in the state  Deters investment
  • Findings: Costs of Corruption  Impossible to know exact cost  Measure erosion of public confidence and gov’t legitimacy?  Possible to estimate magnitude of corruption  Bribes: $1 trillion of $30 trillion world economy  (World Bank survey, 2001-2002)  Not counting embezzlement or fraud  President Abacha: $5 billion (Transparency International)  Also favors, presents, services  Halve corruption = 400% increase in income/capita  Corruption = 20% tax on foreign investors
  • Findings: Economic Potential  Strong, large private sector  Educated professionals  Many foreign firms already present  FDI greater than most other African countries  Many natural resources  Lots of oil  Trying to attract more FDI with incentives
  • Conclusions
  • Potential Policy?  Simplify complex tax  Increase system & customs transparency  Increase  Accountability privatization  Focus on  Encourage incentives, preventio democratic n, & reforms processes: free press, auditors