This paper studied corruption and the Nigerian economic growth. In doing this, the study looked at historical overview of corruption in Nigeria and conceptual issues were also discussed. It also reviewed the causes and effects of corruption, without leaving out the dynamics of corruption. Also, the study looked at the relationship between corruption and the Nigerian economic growth. However, the study introduces a new perspective on the role of corruption in economic growth and provides quantitative estimates of the impact of corruption on the economic growth in Nigeria as well as their causal relationship. This study used the ordinary least squares OLS to determine the relationship between corruption and economy growth. The study applied the granger causality method to measure the causal relationship that exists between corruption and the gross domestic product GDP. The results revealed that corruption impairs and impacts economic growth. It is on this basis, we draw our conclusion and suggest that Private Anti-Corruption Initiatives, Public anticorruption initiatives and Public education campaign/programmes should be strengthened and motivated in to address the cause of corruption rather than its effects.


Corruption is as aged as the existence of man. It exists in the public and private sectors, profit and nonprofit as well as charitable organizations. It subsists both in the developing and also in the developed nations but predominant in the developing countries hence, it remains a symptom of a poorly functioning nation. In Nigeria it is evidenced from the ongoing probes on oil petroleum subsidy fraud in Nigeria, fraudulent misappropriation of pension funds, recycling of items in the 2012 Budget among others. Therefore, there is a growing worldwide concern over its spread due to so many factors. Highly corrupt nations are always perpetuated with vicious circle of poverty: Low rate of saving which leads to low incomes and which in turn leads to low investment and productivity. Others may include high capital flight: the negative consequences of the prevalent corruption continue to hamper the growth and development of the economy, causes insecurity of lives and property of the citizenry as evident from several Boko Haram attacks, heightened level of poverty and unemployment. Decaying infrastructure are notable and common features which are largely attributable to the high incidence of corruption which has reached a prevalent level.

The persistency of corruption erodes the social economic value of a nation. Therefore, reforming public institutions and government policies is essential but poverty, a product of corruption limits the available options. However, policy makers arrive at plausible solutions only after understanding corruptions effects on the efficiency and equity of an economic system Nwaobi, 2004. Therefore, this study seeks to use ordinary least squares OLS estimations to estimate the impact of corruption on the economic output. In addition to this, the study employed the granger causality method to measure the causal relationship that exists between corruption and the economic output. The study relied on secondary data which have been sourced from the various series of the Central Bank of Nigeria statistical bulletin and Transparency International 19942005 Corruption Index publications. The paper is divided into five sections namely: section one introduced the study, section two is about evolution of corruption and conceptual framework, section three discusses materials and methodology used while section four presents the analyzed results and section five concludes with suggested policy issues.

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