to be at high levels
Weak policies that
Complex tax system
Large labor force
Coast Line and
Lots of FDI
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?
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
Nigeria’s ranks and scores are weak
Findings: What Businesses Look
For When Investing in a Country
Ease of doing business
Starting and closing a
Dealing with licenses
Independence: 1 Oct. 1960 (from
Population Growth Rate: 2.4%
GDP- per capita (PPP): $2,200
Independence: 31 Aug. 1957
Population Growth Rate: 1.6%
GDP- per capita (PPP): $14,400
Independence: 30 Sept. 1966
Population Growth Rate: 1.5%
GDP- per capita (PPP): $14,700
Independence: 18 Sept. 1810
Population Growth Rate: 0.9%
GDP- per capita (PPP): $14,400
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
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
Corruption has become an institution, but not a
Citizens are not seeing improvements, despite
substantial oil revenues
Calling for improvement of basic conditions
Findings: Attracting Business
Government has been seeking international
investment: China, Libya, India
Many NMCs still unwilling to make risky
People and companies seek improvements:
infrastructure, transparency, property rights,
Trade and imports vs. industry protection
Benefits of FDI
Findings: Good Governance
Governance process of making and
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
Common themes among all definitions, applicable to
Nigeria, will address the corruption problem as well as
stimulate international confidence and investment
What are the impacts of corruption?
How does corruption affect the investment climate
and international business?
What are the economic and social costs of
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
Uneven playing field
Harms reputation and trust in the state
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
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