**Abstract**

Corruption is as old as man's existence. It manifests in various places, ways, extent and sphere to impede economic growth, including Nigeria. This chapter presents corruption dynamics and its impact on economic growth in Nigeria. Among other things, the chapter reviewed the Nigerian economy in context, with focus on cases and forms (embezzlement, favoritism, bribery, and extortion) of corruption in Nigeria. Other matters discussed are anti-corruption agencies and channels of corruption in Nigeria. Following the review and discussions therein, the chapter concludes that corruption occurs in diverse forms and it is an act that deviates from the extant law. The study further concludes that the persistence of corruption in an economy impedes economic growth. The Nigerian case has proven that the greasethe-wheel assumption cannot hold because the growth of Nigeria has been affected drastically through the existence of corruption. Considering the dimensions that corruption has taken in Nigeria, it has become difficult or even impossible to eradicate corruption in the country, but curbing this cancer worm and reducing it to the barest minimum are of great importance to achieve the level of growth needed and make Nigeria restore sustainable economic growth path.

**Keywords:** corruption, grease-the-wheel, dynamics, economic growth, embezzlement, Nigeria

## **1. Introduction**

Corruption is global, not excluding Nigeria. It is inimical to economic growth, which serves as a bane to economic growth and development in Nigeria. It undermines government efforts and policies advanced to secure meaningful well-being for the citizenry. Undeniably, corruption is becoming a life pattern in Nigeria. It is prominent among public officers and private establishments. Indeed, several efforts by successive regimes to understand the dynamics of development in corruption and its challenges to economic growth in Nigeria have been confronted with various odds. As a result, it is necessary to understand corruption and why it has remained inflexibly endemic and intractable in the Nigerian economic fiber and fortitude. This study provides insights to this challenge by conceptualizing the concept, corruption, evaluating its evolution, causes and forms, and its impacts on the Nigerian economy.

The rest of this chapter is divided into nine sections. Section two explains overview of the Nigerian economy. Cases of corruption in Nigeria were presented in section three. While section four presents the forms of corruption, sections five, six, and seven respectively present causes, anti-corruption agencies, and disadvantages of corruption in Nigeria. In section eight, corruption and its consequences on economic growth were discussed, and section nine presents channels of corruption in Nigeria and finally, the conclusions were drawn in section ten.

#### **2. Overview of the Nigerian economy**

Recognized as one of the largest economies in Africa, Nigeria has been on the part of growth since the discovery of oil in commercial quantity. Nigeria has an abundance of crude oil and gas, which generates most of the revenue of the economy [1]. The oil sector averagely contributes, annually, about 10, 65, and 85% to gross domestic product (GDP), revenue and foreign exchange earnings, respectively [2]. Unfortunately, Nigeria has paid less attention to other important sectors of the economy such as the mining industry and agricultural industries among others since oil was discovered in commercial quantity. On the other hand, proceeds from crude oil sales have been characterized with corruption, diversion, and reckless spending.

In 2018, OPEC reports estimated the oil reserve of Nigeria to be 37.06 million barrels. With such reserve, the ability of the Nigerian economy to grow, moving on the wheels of crude oil remains very high. This report further stated that Nigeria still has the potential to discover and explore oil that indicates the possibility of an increase in the reserve of oil and also an increase in the exportation of oil. It is impossible to discuss the growth of the Nigerian economy without talking about the oil sector, which is the major source of the revenue of Nigeria. Nigeria is the largest oil producer in Africa, producing about 2.4 million barrel per day (mbd) [1].

Nigeria is also rich in human resources, and other mineral and natural resources, and has a population of over 180 million people [1]. The country is endowed with other resources such as gold, iron ore, limestone, coal, rich soils among several other resources upon which it can survive. Harnessing the oil resources and the natural resources that Nigeria possess will make Nigerian not just the Giant in Africa but a place of reference in the global village. Unfortunately, the sector has been characterized with corrupt practices.

## **3. Cases of corruption in Nigeria**

Defined by the World Bank and Transparency International, corruption is an unlawful use of public offices for personal gain and it has been a problem that has hampered the growth of the Nigerian economy over the years [3]. According to Organization of Petroleum Exporting [4] and Raimi et al. 5], corruption is as old as the creation of man. Man by its selfish nature struggles to meet his selfish desires and in the process engage in corrupt activities. Corruption exists in the public sector as well as the private sector of every economy be it a developed economy or a developing economy [6]. The evidence of the existence of corruption in Nigeria can be traced to the investigation on oil petroleum subsidy fraud, misuse of pension funds, and the recycling of items in previous budgets as a strategy to loot funds [6].

The history and existence of corruption in Nigeria dates back to the period before, during, and after colonization. Nigerian leaders and merchants during the *Corruption Dynamics and Economic Growth in Nigeria DOI: http://dx.doi.org/10.5772/intechopen.105713*

pre-colonial period collected foreign products and gave able bodied men to the whites in exchange. As far back as that time, Nigerians preferred personal gains over life and so they could easily trade humans for foreign goods. Corruption has lived in Nigeria for this long because checking and curbing corruption is only possible through the use of corruption a situation that further destroys the system [6].

Another scenario that has been attributed to corruption in Nigeria was the forceful taking over of power by the military government [7]. Although the military-sized power with the cover-up story of maintaining peace and order, arguments have come up to fault this story as many believe that the military came into government for the sake of their own selfish interest. The military through the suspension of the constitution and the neglect of the rule of law looted public funds that were meant to facilitate the growth of Nigeria [3]. Consequently, corruption is strongly rooted in the military regime [7].

Considering the level at which corruption had grown in Nigeria, the return of Nigeria to civilian rule could not reduce the level of corruption but rather, it grew and became a thorn to the growth of the Nigerian economy. As at 2011, Transparency International ranked Nigeria as the 143th out of the 182 nations of the world experiencing corruption [3]. In 2018, Nigeria ranked 144th out of 180th with Somalia topping the list with the rank of 180th and in 2019, Nigeria ranked 146th out of 180 [1].

## **4. Forms of corruption in Nigeria**

More precisely, corruption can be seen to be a deviation from the norms of the society. This definition goes beyond looting of funds but rather encompasses all activities that are against the rules that uphold a nation. Corruption therefore manifests in various forms which [8–10] pointed out the following:


these motorists pay meager amounts and then allow them to go. This system has become a part of the society.

v.Another form of corruption that is popular in Nigeria is usually carried out by bureaucrats and politicians. They collaborate with international organizations to defraud the government in business transactions, for the purpose of personal gains and self-ratifications. This type of corruption according to Tanzi and Davoodi [3] is referred to as grand corruption.
