Impact of Corruption on the Growth of the Nigerian Economy-1960-2012: Error Correction Mechanism (ECM)

Abstract

This paper examined the impact of corruption on the growth of Nigerian economy using time series data from 1960 to 2012. The paper utilized secondary data and the paper explored various econometrics and/or statistical analytical (Eview 7.2) method to examine the relationship between corruption and economic growth. The paper explored unit root, Cointegration analysis to test for the Nigeria’s time series data and used an error correction mechanism to determine the long-run relationship among the variables examined. From the results of the findings, it was discovered that corruption has an inverse relationship with growth of an economy. The paper recommended based on the econometric results that the government should intensify effort to create more agencies beside EFCC and ICPC to address cases of corrupt practices in the economy, encourage leaders that display transparency, honesty, probity, accountability, purposefulness and commitment to good ideals of the society before followers will be convinced of the ingenuity of such crusade,  ensure corruption as a theme needs to be discourse on debate by government representatives at federal, State and local levels. This will create the awareness that corrupt practices are against norms, culture and social value of the society. Put all these together will dissuade corruption and boost economic growth to increase influx of foreign investors.