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The Impact of Corruption on Nigeria’s Economic Development 1980-2021


This study was on the impact of corruption on Nigeria’s economic development 1980-2021. Three objectives were raised which included:  To analyze the trends and patterns of corruption in Nigeria over the past four decades, to assess the impact of corruption on key macroeconomic indicators such as GDP growth and to investigate the mechanisms through which corruption affects economic development. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from selected CBN, Uyo. Hypothesis was tested using Chi-Square statistical tool (SPSS).





Corruption’s detrimental effects on Nigeria’s economic development are profound, encompassing various sectors and hindering progress. Research indicates that corruption exacerbates income inequality, undermines investor confidence, distorts resource allocation, and weakens institutions crucial for economic growth.

According to Transparency International’s Corruption Perceptions Index, Nigeria consistently ranks poorly, reflecting the prevalence of corruption within the country (Transparency International, 2021). Corruption erodes public trust in governance and leads to a misallocation of resources, diverting funds meant for development projects into the pockets of corrupt officials (Oyekanmi, 2019).

Furthermore, studies have highlighted the negative impact of corruption on income distribution. Oyinlola and Owoye (2020) found that corruption exacerbates income inequality by disproportionately benefiting the elite and perpetuating poverty among the marginalized population. This disparity undermines social cohesion and hampers sustainable economic development.

Corruption also deters foreign direct investment (FDI) and domestic entrepreneurship. Investors are wary of operating in environments rife with corruption due to increased business risks and uncertainty (Oyekanmi, 2019). The lack of transparency and accountability discourages entrepreneurs from investing in productive ventures, stifling innovation and economic diversification (Adebayo & Ogundipe, 2017).

Moreover, corruption weakens institutions essential for economic development, such as the judiciary and regulatory agencies. A dysfunctional legal system hampers contract enforcement and dispute resolution, further deterring investment and impeding economic growth (Kaufmann, Kraay, & Mastruzzi, 2010).

Corruption undermines Nigeria’s economic development by fostering inequality, deterring investment, distorting resource allocation, and weakening institutions. Addressing corruption requires concerted efforts to enhance transparency, strengthen institutions, and enforce anti-corruption measures effectively.

Statement of the problem

“Corruption poses a significant obstacle to Nigeria’s economic development, as evidenced by its pervasive influence across various sectors of society. Despite efforts to combat corruption, its detrimental effects persist, hindering progress towards sustainable economic growth, exacerbating income inequality, undermining investor confidence, distorting resource allocation, and weakening institutional frameworks crucial for development. Understanding the multifaceted impact of corruption on Nigeria’s economy is essential for devising effective strategies to address this pervasive challenge and foster long-term economic prosperity.”

Objective of the study

The objectives of the study are to investigate the impact of corruption on Nigeria’s economic development 1980-2021. The following objectives are determined

  1. To analyze the trends and patterns of corruption in Nigeria over the past four decades.
  2. To assess the impact of corruption on key macroeconomic indicators such as GDP growth.
  3. To investigate the mechanisms through which corruption affects economic development.

Research Hypotheses

H1: there are no trends and patterns of corruption in Nigeria over the past four decades

H2: there is no impact of corruption on key macroeconomic indicators such as GDP growth

Significance of the study

The significance of the study on “The impact of corruption on Nigeria’s economic development 1980-2021” lies in its potential to inform policy formulation, guide interventions, and foster sustainable development in Nigeria. The study holds several key significances:

By comprehensively analyzing the relationship between corruption and economic development over four decades, the study can provide policymakers with evidence-based insights. Understanding the specific mechanisms through which corruption hampers economic growth and exacerbates inequality can inform the design and implementation of more effective anti-corruption policies and strategies.

Nigeria’s attractiveness as an investment destination is closely linked to its ability to combat corruption effectively. A thorough examination of corruption’s impact on key economic indicators such as GDP growth and investment inflows can help restore investor confidence by identifying areas for improvement and highlighting the importance of anti-corruption measures in promoting a conducive business environment.

Corruption often exacerbates income inequality and undermines efforts to alleviate poverty. By shedding light on the ways in which corruption perpetuates socioeconomic disparities, the study can contribute to advocacy efforts aimed at promoting social justice and inclusive economic development in Nigeria.

The study adds to the body of literature on corruption and economic development, particularly within the context of Nigeria. By synthesizing existing research, analyzing trends, and offering empirical insights, the study provides valuable information for scholars, researchers, and students interested in understanding the complex dynamics of corruption and its implications for economic growth.

By raising awareness of the pervasive effects of corruption and the importance of anti-corruption efforts, the study can contribute to capacity building initiatives aimed at strengthening institutional frameworks, enhancing transparency, and fostering a culture of integrity within Nigerian society.

Scope of the study

The scope of the study covers the impact of corruption on Nigeria economy. The study will cover 1980-2021

Limitation of the study

While conducting the study on “The impact of corruption on Nigeria’s economic development 1980-2021,” several limitations should be acknowledged:

  1. Data Limitations: The availability, reliability, and consistency of data on corruption and economic indicators in Nigeria may pose significant challenges. Data gaps, inconsistencies, and inaccuracies could affect the robustness of the analysis and the validity of the findings.
  2. Temporal Scope: Although the study covers a considerable time span from 1980 to 2021, focusing on a broader temporal scope may introduce complexities in data collection, analysis, and interpretation. Additionally, changes in methodologies, definitions, and measurement techniques over time could affect the comparability of data across different periods.
  3. Causal Inference: Establishing a causal relationship between corruption and economic development is inherently challenging due to the presence of confounding factors and endogeneity issues. While the study may identify associations and correlations between corruption and economic indicators, determining causality requires rigorous econometric techniques and may be subject to limitations.


  1. Corruption: Corruption refers to the abuse of entrusted power for private gain, which may include bribery, embezzlement, nepotism, patronage, and other forms of unethical behavior aimed at circumventing rules and regulations for personal or collective benefit.
  2. Economic Development: Economic development encompasses the sustained improvement in the standard of living, well-being, and economic opportunities available to individuals within a society. It involves increases in per capita income, access to essential services, employment opportunities, infrastructure development, and overall improvement in living conditions.
  3. Gross Domestic Product (GDP): GDP is a measure of the total value of goods and services produced within a country’s borders over a specified period, typically annually or quarterly. It serves as a key indicator of a nation’s economic performance and overall economic health.
  4. Income Inequality: Income inequality refers to the unequal distribution of income among individuals or households within a society. It is typically measured using metrics such as the Gini coefficient, which quantifies the extent to which income distribution deviates from perfect equality.
  5. Foreign Direct Investment (FDI): FDI refers to investment made by a foreign entity (individual, business, or government) in the productive assets of another country, such as factories, infrastructure, or businesses. FDI plays a significant role in promoting economic growth, employment generation, and technology transfer in recipient countries.
  6. Institutional Quality: Institutional quality refers to the effectiveness, efficiency, and integrity of a country’s institutions, including government agencies, legal systems, regulatory bodies, and public services. High institutional quality is associated with transparent, accountable, and well-functioning governance structures conducive to economic development.


  •  Enofe, A. O Oriaifoh, A. Akolo, I. & Oriaifoh C. L. (2016). Corruption and Nigeria economic growth. International Journal of Advanced Academic Research | Social & Management Sciences. 2(4). 25.
  •  Fraj, S. H. & Lachhab, A. (2015). Relationship between corruption and economic growth: the case of developing countries. International Journal of Economics, Commerce and Management, 3(9), 862-875. 26.
  •  Gordon, H. & Scott (1965). Economic Theory of Common Property Resources. Journal of Political Economy, 62. https://doi.org/10.1086/257497 27.
  • Gründler, K. & Potrafke, N. (2019). Corruption and economic growth: new empirical evidence. ifo Working Paper No. 309. 28.
  • Gupta, S., Davoodi, H. & Alonso-Terme, R. (2002). Does Corruption Affect Income Inequality and Poverty? Economics of Governance, 3(1): 23-45. https://doi.org/10.1007/s101010100039


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