Corruption and Economic Growth in Nigeria

Abstract

The papersurveyed the effect of corruption on economic growth in Nigeria for the period of 2000to 2024. The specific objectives are to; investigated howcorruption perception index (CPI), misallocation of public investment (MPI) and human capital mismanagement (HCM) affect Nigeria’s economic growth. The research used time-series data sourced from the World Bank, Transparency International, the Central Bank of Nigeria, and the National Bureau of Statistics. The analysis employed the Autoregressive Distributed Lag (ARDL) approach to estimate both short-run and long-run relationships among the variables. Economic growthwhich serves as the dependent variable was proxied by GDP growth rate, while CPI, MPI, and HCM are the independent variables. The results revealed that, Corruption Perception Index (CPI) exhibits a strong negative and statistically significant effect on GDP growth, confirming that higher levels of perceived corruption slow down economic progress. But Misallocation of Public Investment (MPI), shows a positive long-run effect on economic growth. Similarly, Human Capital Mismanagement (HCM) demonstrates a weak but positive long-run relationship, suggesting that, while education and health expenditures are crucial for growth, corruption-driven mismanagement diminishes their impact. The study concludes that, corruption remains a major impediment to economic growth in Nigeria. Based on the findings, it was recommended that, strengthening of anti-corruption institutions, digitalization of public financial management, transparency in procurement, and the enhancement of accountability mechanisms of public funds.