ABSTRACT
Corruption
is an anti-social behaviour conferring improper benefits contrary to legal and
moral norms, which undermine the authorities to improve the living conditions
of the people. It is one of the greatest challenges of the contemporary world
today. The increasing wave of corruption and its devastating impact on the
Nigeria economy has become a national problem which has triggered serious
research interest within the academics and the industry. This research project
therefore is an evaluation of the Impact of Corruption on Fiscal Policy
Management in Nigeria. Accordingly, the study explored the extent to which
corruption in the fiscal policy management can affect government expenditure,
deficit financing and tax revenue. The study adopted ex-post facto research
design. It was conducted using 12 year annualized time series data spanning the
period, 2000-2011. Data were generated from the Central Bank of Nigeria
Statistical Bulletin and Transparency International website. A computer based
regression analysis using the Special Package for Social Science (SPSS)
computer version was employed to test three formulated hypotheses of the study.
Evidence from the descriptive analysis of the research indicated that Nigeria
is highly corrupt going by the rating of transparency international. But
comparing the transparency initiative rating with the Nigeria fiscal policy
parameter, this study concludes that corruption rather has a significant
positive effect on overall government expenditure and tax revenue but no significant
positive effect on deficit financing in Nigeria. In line with this conclusions,
the researcher recommends amongst others that government leadership should
cultivate strong willingness to fight corruption head-on. To achieve this, they
should have the political will to prosecute corrupt officers instantly they are
caught.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Corruption
is one of the greatest challenges of the contemporary world today. Literarily,
corruption connotes an anti-social behaviour conferring improper benefits
contrary to legal and moral norms, which undermine the authorities to improve
the living conditions of the people (Osaba, 1996; Tanzi, 1998; Folorunso,
2007). To the developing countries, the prevalence
of corruption vary from country to country. In Nigeria precisely, corruption
has posed serious danger to both the micro household and the economy as a
whole. It has undermined good government, distorted public policy, harmed the
private sector, hampared public sector development and have particularly hurt
the poor (Transparency International; 2008). Farida, (2010) in Obasanjo
,(2010:2) put it that corruption is the greatest single bane for our society
today. According to Alemika, (2004), corruption is a serious problem in Nigeria
today as it is increasingly widespreading and unfortunately being tolerated by
the public.
Corruption
in Nigeria seems to have acquired immunity against various political and legal
measures aimed at its control. Since independence in 1960, successive
administrations have been enmeshed in crises of confidence ochastrated by
corruption as reflected in the processes of policy formulation and
implementation. In the first republic, corruption was kept at manageable level.
Cases of corruption during this period were sometimes clouded by political
fighting. The trend has for long changed as the evil wind has permiated into
all the facets of the Nigerian economy and mostly the fiscal policy
environment.
Conventionally,
fiscal policy has been associated with the use of taxation and public
expenditure to influence the level of economic activities (Okoro, 2009:340). It
is an economic measure which involves the deliberate use of government spending
and taxes to achieve macroeconomic growth. The implementation of fiscal policy
is essentially routed in the government budgets. The budget is therefore more
than a plan for administering the government sector. It rather reflects and
shapes a country economic life. The first recorded corruption in fiscal policy
management in Nigeria can be traced back to the pre-independence period when in
1944, a firm belonging to Azikiwe and family bought the African Continental
Bank in Lagos (Uche, 1997:57). A report wrote that most of the paid-up capital
of the
During
a certain civilian regime, the sum of N200 Million supplementary
allocations to a state government meant for the payment of salary arrears disappeared.
Chuta, (2004:27) lends credence to this where he says that corruption had
become so pervasive, and may have been given official recognition to the extent
that the disappearance of the sum of N 200 Million as supplementary
allocation to a state government, for the payment of overdue salaries was
dismissed simply as owing to “change of hand”. Corruption has pre occupied and
confounded the minds of Nigerians for decades. Magbadelo, (2006:2) states that
ever since Nigeria’s first republic collapsed in July 1966 amid allegations of
massive corruption, the fight against corruption have developed into an
important public policy issue.
1.2 STATEMENT OF THE PROBLEM
The
increasing wave of corruption and its devastating impact on national economies
have become a global problem so much so that some World Bank researchers have
embarked on the study of this problem in some developed countries of the world.
Hence, the current researcher’s interest is to do a similar research here in
Nigeria to find out the extent to which corruption
in the fiscal policy management can affect government expenditure, deficit
financing and tax revenue.
The
choice to study the impact of corruption on fiscal policy management as
measured from the stand point of government expenditure as well as deficit
financing is predicated on the fact that the incidence of corruption is
frequently reported in these areas in Nigeria. Also, the researcher became
interested in this topic because corruption in fiscal policy management seems
to reduce the funds budgeted to be spent on the basic needs. There are a lot of
reported cases of abandoned projects. Again there is low contribution of tax
revenue to the government revenue. All these situations compelled the researcher
to investigate the extent to which corruption affects fiscal policy management.
Besides,
the recent wave of corrupt practices noticed amongst the political office
holders in Nigeria has had a negative impact on the people of the country.
These corrupt practices are written in our dailies and are always reported on
the television or sometimes we hear of them through radio announcements. Hence,
the researcher resolved to find out, through a thorough investigative research,
the actual impact of corruption on the fiscal policy management in Nigeria......
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Item Type: Postgraduate Material | Attribute: 121 pages | Chapters: 1-5
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