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Nigeria

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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
    Corruption perceived to be at high levels
    Weak policies that deter investment
    Political instability
    Weak infrastructure
    Complex tax system
    Large labor force
    Natural resources (oil)
    Coast Line and Ports
    String private sector
    Lots of FDI
    Cons
    Pros
  • 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, patronage (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
  • Worldwide Governance Indicators (WGI)
  • Findings: What Businesses Look For When Investing in a Country
    Ease of doing business
    Starting and closing a business
    Dealing with licenses
    Employing workers
    Registering property
    • Getting credit
    • Protecting investors
    • Paying taxes
    • Trading across borders
    • Enforcing contracts
  • Comparative Study
    Nigeria
    Federal Republic
    Independence: 1 Oct. 1960 (from UK)
    Population Growth Rate: 2.4%
    GDP- per capita (PPP): $2,200
    Malaysia
    Constitutional Monarchy
    Independence: 31 Aug. 1957 (from UK)
    Population Growth Rate: 1.6%
    GDP- per capita (PPP): $14,400
    Botswana
    Parliamentary Republic
    Independence: 30 Sept. 1966 (from UK)
    Population Growth Rate: 1.5%
    GDP- per capita (PPP): $14,700
    Chile
    Republic
    Independence: 18 Sept. 1810 (from Spain)
    Population Growth Rate: 0.9%
    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
    Common themes among all definitions, applicable to Nigeria, will address the corruption problem as well as stimulate international confidence and investment
  • 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?
    With good 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 system & customs
    Increase privatization
    Encourage democratic processes: free press, auditors
    Increase transparency
    Accountability
    Focus on incentives, prevention, & reforms