CHAPTER ONE
INTRODUCTION
1.1 Background of the study
Corruption is efforts to secure wealth or power through illegal means for private gain at public expense; or a misuse of public power for private benefit. Corruption like cockroaches has co-existed with human society for a long time and remains as one of the problems in many of the world’s developing economies with devastating consequences. Corruption as a phenomenon, is a global problem, and exists in varying degrees in different countries (Luna, 2002). Corruption is not only found in democratic and dictatorial politics, but also in feudal, capitalist and socialist economies. Christian, Muslim, Hindu, and Buddhist cultures are equally bedeviled by corruption (Dike, 2005).
In Nigeria, it is one of the many unresolved problems Madichie (2005) that have critically hobbled and skewed development. It remains a long-term major political and economic challenge for Nigeria (Maduagwe, 1996). It is a canker worm that has eaten deep in the fabric of the nation. It ranges from petty corruption to political / bureaucratic corruption or Systemic corruption (Abimbola, 2007).
World Bank studies put corruption at over $1 trillion per year accounting for up to 12% of the Gross Domestic Product of nations like Nigeria, Kenya and Venezuela (Nwabuzor, 2005).
Corruption is endemic as well as an enemy within (Acemoghi, 2000). It is a canker worm that has eaten deep in the fabric of the country and had stunted growth in all sectors. It has been the primary reason behind the country difficulties in developing fast. This is evident in Transparency International’s has consistent rating of Nigeria as one of the top three most corrupt countries in the world (Ribadu, 2003).
As part of effort at fighting corruption and strengthening the economy, Nigeria embarked on an aggressive pursuit of economic reform that through privatization, banking sector reform, anti-corruption campaigns and establishment of clear and transparent fiscal standards since 1999.
The major aim of the economic reforms in Nigeria is to provide a conducive environment for private investment (African Economic Outlook, 2006). The reform process has the following key pillars: improved macroeconomic management, reform of the financial sector, institutional reforms, privatization and deregulation, and improvement of the infrastructure. The importance of infrastructure for economic growth and development cannot be overemphasized. The poor state of electricity, transport and communications is a major handicap for doing business in Nigeria. The Federal Government of Nigeria through its Central Bank made progress in consolidation of the banking system which was prior to the reforms was highly fragmented, with many banks having very small and undiversified capitalisation. The reform stipulated a minimum paid-up capital of $188 million, up from $15 million, with a deadline for compliance at the end of December 2005. This resulted in a record number of bank mergers and acquisitions. As a result, the number of banks in Nigeria has shrunk from 89 in 2004 to 25 in December 2005, (Alisina,1999).
Ports authorities in Nigeria face corruption challenges that are rooted in the sector-wide issues. A 2018 report prepared by the Lagos Chamber of Commerce and Industry estimated that illegal charges, bureaucratic red tape, delays and capacity under-utilization in ports cost the country around 3% of gross domestic product (GDP) annually.(luna,2002). These are long-standing problems. Commenting on the situation in the 1990s, Chat-ham House wrote that “ports in Lagos had a notorious reputation: vessels often had to wait for weeks – sometimes months – offshore until a berth became free, while rampant corruption added hugely to the time and cost entailed in clearing cargo for onward delivery to its final destination.”(abimbola,2007) Challenges of congestion and lack of adequate infrastructure resulted in its biggest port Apapa in Lagos losing its leadership position as a regional gateway for shipping to the neighboring port of Lomé in Togo. In 2017, Lome became the largest port in West Africa by volume of containers handled.(dike,2005). Interaction between government and business in Nigerian ports faced threats of delays, unpredictability and confusion around processes that lead to illicit payments to circumvent procedures. Based on a surveyof79leadersintheindustry,theLagosChamberofCommerceestimatedthatillegalchargesadded50%tothecostofimportsand60%forexports.(maduagwe,1996).Inadditiontobeingamajorsourceoflostrevenueforthegovernmentandincreasingthecostofgoodsforcitizens,illicitpaymentsincreasedoperationalcostsforcompaniesandexposedthemtosignificantregulatoryrisk.Asaresult,bothbusinessesandthegovernmenthadstrongincentivestoworktogethertoaddress these issues.
1.2 Statement of research problem
corruption is endemic as well as an enemy within . It is a canker worm that has eaten deep in the fabric of the country and had stunted growth in all sectors. It has been the primary reason behind the country difficulties in developing fast. This is evident in Transparency International’s has consistent rating of Nigeria as one of the top three
most corrupt countries in the world.in recent times the Nigerian ports authority has experienced some level of corruption whereby, illegalchargesadded50%tothecostofimportsand60%forexports.Inadditiontobeingamajorsourceoflostrevenueforthegovernmentandincreasingthecostofgoodsforcitizens,illicitpaymentsincreasedoperationalcostsforcompaniesandexposedthemtosignificantregulatoryrisk.these and more are what will be examined in this study.
1.3 Objectives of the study
The primary objective of this study are:
To find out the effect of corruption in Nigerian ports authority on the economic growth of Nigeria.
To find out the cause of corruption in Nigerian ports authority
To find out ways corruption can be reduced or eradicated in Nigerian ports authority.
To find out how revenue from ports authority can contribute to the economic growth of Nigeria.
1.4 Research questions
Do you think corruption in ports authority has an effect on Nigerian economic growth?
Do you think there is something that causes corruption in ports authority?
Do you think corruption can be reduced in Nigerian ports authority?
Do you think revenue generated from ports authority can contribute to Nigerian economic growth?
1.5 Significance of the study
The significance of this study cannot be underestimated as:
l This study will examine the effect of corruption in government agency on the economic growth and development of Nigeria
l The findings of this research work will undoubtedly provide the much needed information to government organizations, government agencies, and academia.
1.6 Scope of the study
This study intends to examine the effect of corruption in government agency on the economic growth and development of Nigeria using Nigerian porta authority as a case study.
1.7 Limitations of the study
This study was constrained by a number of factors which are as follows:
just like any other research, ranging from unavailability of needed accurate materials on the topic under study, inability to get data
Financial constraint , was faced by the researcher ,in getting relevant materials and in printing and collation of questionnaires
Time factor: time factor pose another constraint since having to shuttle between writing of the research and also engaging in other academic work making it uneasy for the researcher
1.8 Operational definition of terms
Effect:this is a change which is a result or consequence of an action or other cause.
Corruption:this is a dishonest or fraudulent conduct by those in power, typically involving bribery.
Government agency: this is a permanent or semi-permanent organization in the machinery of government that is responsible for the oversight and administration of specific functions, such as an administration.
Economic growth: this is an increase in the production of economic goods and services, compared from one period of time to another.
Development: this is the process of developing or being developed.
Ports authority: this is a government commission that manages bridges, tunnels, airports, and other such facilities of a port or city.
REFERENCES
Abimbola, A. (2007). Nigeria: Cesspits of Corruption. This Day Newspaper (Lagos) Analysis 19 June 2007
Acemoglu, D., and Verdier, T., (2000). "The Choice between Market Failures and corruption." American Economic
Review 90: 194-211.
African Economic Outlook (2006). Nigeria. African Economic Outlook 2005-2006. Retrieved on the 20 th April 2007 on
http://209.85.129.104/www.oecd.org/dev/publications/africanoutlook
Alesina, A., and Weder, B., (1999). Do Corrupt Governments Receive Less Foreign Aid,NBER Working Paper
Dike, V.E (2005). Corruption in Nigeria: A New Paradigm for Effective Control. Africa Economic Analysis. Retrieved
on 1st August 2007 from http://www.jsdafrica.com/Jsda/Summer1999/articlespdf/ARC%20%20A%2
0Psychological%20Analysis%20of%20Corruption%20in%20Nigeria.pdf
Luna, F., and Perrone, A. (2002). Agent-based Methods in Economics and Finance:Simulations in Swarm, Kluwer
Academic Publishers.
Madichie N. O. (2005). Corruption in Nigeria: how effective is the corruption perception index in highlighting the
economic malaise? World Review of Science, Technology and Sustainable Development 2005 - Vol. 2, No.3/4 pp. 320 -
335
Maduagwe, M. O. (1996). Nigeria in search of political culture. The Political Class, Corruption and Democratization. In
Corruption and Democratization Nigeria, 13. 18-19 ( Alex Gboyega ed., 1996)
Nwabuzor, A. (2005). Corruption and Development: New Initiatives in Economic Openness and Strengthened Rule of
Law. Ethics, a publication of Springer
Volume 59, Number 1, June 2005 , pp. 121-138(18)
Ribadu, M. N. (2006). Nigeria’s Struggle with Corruption. A paper presented to US Congressional House Committee on
International Development, Washington, DC on 18 May 2006.
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