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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