**9. Channels through which corruption affects the growth of a nation**

Based on the works of Lemke [13] and Tanzi and Davoodi [3], corruption can affect the growth of any nation through the following ways:


Furthermore, cross-country data indicate that corruption is at all times negatively associated with the growth of countries, GDP per capita, economic equality and encourages lower human capital development [6, 14].

In Nigeria, several studies such as [1, 3, 6] and the report of Nevin of Partner West Market Area [1] have described the relationship between corruption and the economic growth of Nigeria to be negative. This means that as corruption continues to increase in Nigeria, the growth of the Nigerian economy will be affected negatively. Particularly, Rotimi et al. [1] in his report said that Nigeria may lose about 37% of GDP by 2030 if the level of corruption in Nigeria is not dealt with. This loss is equated to 1000 USD per person in 2014 and nearly 2000 USD per person by 2030.

Corruption is a serious issue in Nigeria and has affected public finances, business investment as well as the people's standard of living. Corruption according to the report of Rotimi et al. [1] had great effects on the economy of Nigeria. Corruption was said to have effects on government effectiveness through smaller tax base and inefficient government expenditure. Corruption also has effects on the human capital of Nigeria. According to the report of Organization of Petroleum Exporting [4],

*Corruption Dynamics and Economic Growth in Nigeria DOI: http://dx.doi.org/10.5772/intechopen.105713*

most people who have no means of bribing their way through find it difficult to access the basic necessities of life-like education, sound health care, and portable water and other important social amenities. Corruption is always and everywhere a bad thing [3]. Take for instance, to go to school, people need to sponsor them or get a scholarship. The poor cannot sponsor themselves, hence, the need to access the available scholarships. But because they do not have the needed finance to bribe the government officials in charge of government scholarships, they lose these scholarships and end up as illiterate who may fail to give back to their nations in the future. Corruption also weakens the institutions of a nation and lead to inefficiency. To this end, the assumption of Tanzi and Davoodi [3] that, corruption is always and everywhere a bad thing cannot be over looked.

Looking at the effect the high level of corruption has had on the Nigerian economy, the study of Organization of Petroleum Exporting [4] and Raimi et al. [5] revealed that the relationship between economic growth and corruption is negative and this relationship extends beyond the short run. The negative association between the economic growth of Nigeria and corruption based on the study also holds in the long run. The study was conducted using the Solo-swan model that asserts that economic growth is achieved when the level of corruption is minimal.

## **10. Conclusions**

Corruption has been seen to occur globally and manifesting in diverse forms such as bribery, favouritism, extortion, embezzlement, and other forms of acts that deviate from the law. With the persistent existence of corruption in an economy, growth will be difficult to achieve. The Nigerian case has proven that the grease-the-wheel assumption cannot hold because the growth of Nigeria has been affected drastically through the existence of corruption as studies like [1, 3, 6] have proven that corruption affects the growth of the Nigerian economy negatively. 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 in order to achieve the level of growth needed and make Nigeria remain the giant of Africa and self-sufficient.

## **Classification**

JEL Code: D73, F43.

*Corruption – New Insights*
