Corruption and Good Governance in Nigeria


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This was my capstone project. The paper is much more informative but the slideshow portrays the bulk of the research.

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Corruption and Good Governance in Nigeria

  1. 1. Corruption vs. Good governance<br />How International Business Can Improve for Nigeria<br />
  2. 2. Plan of Study<br />Corruption Good Governance<br />Reputable sources<br />Primary research<br />Major NGOs<br />Transparency International<br />Global Integrity<br />World Bank<br />
  3. 3. Topic:<br />
  4. 4. Nigeria<br />
  5. 5. Nigeria<br />Corruption perceived to be at high levels<br />Weak policies that deter investment<br />Political instability<br />Weak infrastructure<br />Complex tax system<br />Large labor force<br />Natural resources (oil)<br />Coast Line and Ports<br />String private sector<br />Lots of FDI<br />Cons<br />Pros<br />
  6. 6. Research Questions<br />What is corruption and how is Nigeria ranked?<br />What do businesses consider when deciding to invest in a country?<br />What have other countries done to combat corruption and improve good governance?<br />
  7. 7. Findings: Corruption<br />State corruption is the misuse or abuse of entrusted power via legislation, mutual understanding or agreement for private gain.<br />Corruption can involve bribery, embezzlement, extortion, fraud, patronage (nepotism, cronyism), rent seeking and graft<br />
  8. 8. Findings: Ranking Nigeria<br />Different organizations that rank countries on governance and corruption<br />Transparency International<br />Global Integrity<br />World Bank<br />Nigeria’s ranks and scores are weak<br />
  9. 9. Corruption Perceptions Index (CPI)<br />
  10. 10. Global Integrity Index <br />
  11. 11. Worldwide Governance Indicators (WGI)<br />
  12. 12. Findings: What Businesses Look For When Investing in a Country<br />Ease of doing business<br />Starting and closing a business<br />Dealing with licenses<br />Employing workers<br />Registering property<br /><ul><li>Getting credit
  13. 13. Protecting investors
  14. 14. Paying taxes
  15. 15. Trading across borders
  16. 16. Enforcing contracts</li></li></ul><li>Comparative Study<br />Nigeria<br />Federal Republic<br />Independence: 1 Oct. 1960 (from UK)<br />Population Growth Rate: 2.4%<br />GDP- per capita (PPP): $2,200<br />Malaysia<br />Constitutional Monarchy<br />Independence: 31 Aug. 1957 (from UK)<br />Population Growth Rate: 1.6%<br />GDP- per capita (PPP): $14,400<br />Botswana<br />Parliamentary Republic<br />Independence: 30 Sept. 1966 (from UK)<br />Population Growth Rate: 1.5%<br />GDP- per capita (PPP): $14,700<br />Chile<br />Republic<br />Independence: 18 Sept. 1810 (from Spain)<br />Population Growth Rate: 0.9%<br />GDP- per capita (PPP): $14,400<br />
  17. 17. Research Questions<br />What are the cultural perceptions of governance?<br />Do the people feel the government is corrupt?<br />Do they feel it could do more to attract international investment?<br />Are the people interested in attracting more FDI?<br />What do business and international organizations generally define as good governance?<br />What institutions and policies are necessary for international business and investment?<br />
  18. 18. Findings: Cultural Perceptions<br />Nigerians still perceive their government to be corrupt<br />Corruption has become an institution, but not a cultural institution<br />Citizens are not seeing improvements, despite substantial oil revenues<br />Calling for improvement of basic conditions<br />Unemployment<br />Poverty<br />Infrastructure<br />
  19. 19. Findings: Attracting Business<br />Government has been seeking international investment: China, Libya, India<br />Many NMCs still unwilling to make risky investment<br />People and companies seek improvements: infrastructure, transparency, property rights, land use<br />Trade and imports vs. industry protection<br />Benefits of FDI<br />
  20. 20. Findings: Good Governance<br />Governance process of making and implementing decisions<br />Can be applied to all organizations: political institutions; local, national, international governments and corporations<br />Several organizations and institutions have developed guidelines for good governance<br />
  21. 21. Findings: Institutions and Securities<br />Common themes among all definitions, applicable to Nigeria, will address the corruption problem as well as stimulate international confidence and investment<br />
  22. 22. Research Questions<br />What are the impacts of corruption? <br />How does corruption affect the investment climate and international business? <br />What are the economic and social costs of corruption? <br />What can be quantified? <br />How far-reaching are the affects of corruption? <br />What is the economic potential of Nigeria? <br />With good governance, what kind of investment could Nigeria expect to attract? <br />
  23. 23. Findings: Impacts of Corruption<br />Costs higher<br />Threatens stability<br />Skews development <br />Uneven playing field<br />Harms reputation and trust in the state<br />Deters investment<br />
  24. 24. Findings: Costs of Corruption<br />Impossible to know exact cost <br />Measure erosion of public confidence and gov’t legitimacy? <br />Possible to estimate magnitude of corruption<br />Bribes: $1 trillion of $30 trillion world economy <br />(World Bank survey, 2001-2002) <br />Not counting embezzlement or fraud<br />President Abacha: $5 billion (Transparency International)<br />Also favors, presents, services<br />Halve corruption = 400% increase in income/capita<br />Corruption = 20% tax on foreign investors<br />
  25. 25. Findings: Economic Potential <br />Strong, large private sector<br />Educated professionals<br />Many foreign firms already present<br />FDI greater than most other African countries<br />Many natural resources<br />Lots of oil <br />Trying to attract more FDI with incentives<br />
  26. 26. Conclusions<br />
  27. 27. Potential Policy?<br />Simplify complex tax system & customs<br />Increase privatization <br />Encourage democratic processes: free press, auditors<br />Increase transparency <br />Accountability<br />Focus on incentives, prevention, & reforms<br />