A Policy Brief by Preston Consults
Introduction: Poverty in Nigeria
The report recently released by the Brookings Institution which provided evidence that Nigeria now has the largest number of extremely poor people in the world came as no surprise, given the high level of corruption in the Country. According to Transparency International’s 2017 Corruption Perception Index, Nigeria is the 32nd most corrupt country in the world. Corruption usually leads to non-inclusive growth, and so the pace of economic and infrastructural development in the country is unable to match the rapidly increasing population as corruption diverts the funds meant for developing wealth-generating infrastructures and programmes.
For the UN’s SDG of eradicating extreme poverty by 2030 to be achieved, 90 people need to leave poverty every minute, and 12 of these people need to come from Nigeria. Currently, an average of 7 people fall below the poverty line every minute in Nigeria. This has resulted in more than 87 million Nigerians living below the poverty line (World Poverty Clock, 2018), despite the country having one of the fastest growing economies in Africa and globally for several years.
While corruption is a major reason why a large proportion of Nigerians live in poverty in the midst of the country’s many resources, poor governance (including weak and ineffective institutions) are the main enablers of corruption in Nigeria.
Corruption as a Key Obstacle to Inclusive Economic Growth
According to the OECD, inclusive growth refers to economic growth that is distributed fairly across society and which creates opportunities for all. Also, the UNDP’s Chief Economist Thangavel Palanivel describes growth as inclusive when it takes place in the sectors in which the poor work (such as agriculture); occurs in places where the poor live (e.g. undeveloped areas with few resources); uses the factors of production that the poor possess (unskilled labour); and reduces the prices of consumption items that the poor consume (e.g. food, fuel and clothing). For inclusive growth to be sustainable, it needs to focus on the provision of education, health and social services. Growth in Nigeria clearly does not meet these criteria of inclusiveness.
In the book recently released by John Campbell (former US Ambassador to Nigeria) and Matthew Page (former US Intelligence Community Expert on Nigeria) titled “Nigeria: What Everybody Needs to Know”, it is stated that even though Nigeria’s 774 local government councils which are responsible for delivering basic education, health and social services are moribund, they still receive more than a third of total public spending. This is a classic example of the many forms corruption takes in Nigeria.
Corruption, whether in the grand or petty form, implies that despite any intelligent plans an administration might have for structurally improving and boosting the economy, the dividends of that country’s output and growth will not reach the masses at the bottom, as funds are diverted before it reaches them. It therefore limits resources for investment in infrastructure and social safety nets.
Apart from the fact that about 45 percent of Nigerians now live below the poverty line, other consequences of diverting public funds for private use include: having only 30.7 percent of the total road network tarred (ICRC); being the second largest contributor to global under-five and maternal mortality rates (UNICEF); and having 10.5 million out of school children, which is the highest globally (UNICEF). The impact of corruption on education in particular goes beyond the numbers, as uneducated and unemployed Nigerian youths are more likely to partake in militancy and insurgency (e.g. Boko Haram and the Niger Delta Avengers), resulting in loss of human lives and physical resources.
Effect of Corruption on Vulnerable Groups in Nigeria
Inclusive economic growth doesn’t stop at just expanding national economies, it goes further to ensure that the most vulnerable people in society are reached and that they also enjoy the benefits of growth. Corruption prevents this from happening, as monies meant for developing these groups are siphoned by the elite. Vulnerable citizens, including women, children and people living with disabilities (PLWDs) are affected more by corruption because they usually depend more on public goods and have less access to private alternatives than the non-vulnerable population.
In Nigeria, women are culturally regarded as the caregivers of their families, and so spend more time than men in unpaid labour. This makes them more likely to feel the impact of corruption on poor service delivery. Also, corruption and bribery involving using sex as a means of payment, especially in the education sector, are experienced more by young women than men.
In addition, PLWDs are more affected by corruption because they have special needs and usually are less able to participate in the processes of designing and implementing public policies and programmes that affect them.
Sustainability of The Anti-Corruption War in Nigeria
Fighting corruption was one of the main campaign promises of the present Nigerian administration during the 2015 elections, and although some effort has been put into it, the effect has been minimal. In fact, the earlier-mentioned book by John Campbell and Matthew Page, indicated that fraudulent enrichment by the political class has increased despite the Buhari government’s anti-corruption fight.
Therefore, far more work needs to be done to ensure that the anti-corruption fight becomes more effective and sustainable. Some suggestions for policy include:
- Institutions, processes and systems that enhance transparency and make corrupt practices more difficult in the first place should be put in place. This includes deepening transparency and monitoring of the budget and procurement processes, which will help stem leakages from the system;
- Government needs to institutionalize a transparent and accountable asset recovery and management system in order to prevent re-looting of recovered assets, and improve Nigeria’s ability to partner with other countries in recovering assets from their jurisdictions;
- Receipts by the revenue generating agencies need to be published regularly to put information in the hands of the people and give them a more informed voice;
- The public should also be regularly updated on the status of the anti-corruption fight, including information on assets recovered, their values and the use to which they will be or have been put to, in order to encourage citizen participation;
- Various Bills that will help the anti-corruption fight which are still pending at the National Assembly, such as the Proceeds of Crime Bill should be speedily passed.
Conclusion
Nigeria must ensure that she is not left behind in the development race by other emerging countries and the rest of Africa. For example, IMF figures suggest that Nigeria’s GDP per capita in current prices of $2,092.47 in 2017 is less than those of peer countries like South Africa ($6,089.22), Brazil ($10,019.79), Mexico ($9,249.27) and Indonesia ($3,858.69). This is partly due to the negative effect of corruption on investment, and by extension on economic growth and development.
Although Nigeria at the moment is performing way below its potential, it is on the verge of possibly turning the corner on to the path to greatness if the right policies to combat the menace of corruption are developed and implemented. The Government needs to urgently reawaken its drive to fight corruption, as it poses a very dangerous threat to Nigeria’s development.
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