This document discusses corruption and good governance in Nigeria and how international business can improve the country. It analyzes Nigeria's high corruption levels according to groups like Transparency International and looks at what deters investment. The document also examines what constitutes good governance, how corruption impacts economies, and Nigeria's potential if it adopted anti-corruption measures and policies to strengthen rule of law, accountability, and transparency.

1. CORRUPTION VS.
GOOD GOVERNANCE
How International Business Can Improve for
Nigeria

2. Plan of Study
 Corruption Good Governance
 Reputable sources
 Primary research
 Major NGOs
 Transparency International
 Global Integrity
 World Bank

3. Topic:

4. Nigeria

5. Nigeria
 Corruption perceived
to be at high levels
 Weak policies that
deter investment
 Political instability
 Weak infrastructure
 Complex tax system
 Large labor force
 Natural resources
(oil)
 Coast Line and Ports
 String private sector
 Lots of FDI
Cons Pros

6. Research Questions
 What is corruption and how is Nigeria ranked?
 What do businesses consider when deciding
to invest in a country?
 What have other countries done to combat
corruption and improve good governance?

7. Findings: Corruption
 State corruption is the misuse or abuse of
entrusted power via legislation, mutual
understanding or agreement for private gain.
 Corruption can involve bribery, embezzlement,
extortion, fraud, patronage (nepotism,
cronyism), rent seeking and graft

8. Findings: Ranking Nigeria
 Different organizations that rank countries on
governance and corruption
 Transparency International
 Global Integrity
 World Bank
 Nigeria’s ranks and scores are weak

9. Corruption Perceptions Index
(CPI)

10. Global Integrity Index
0
10
20
30
40
50
60
70
80
90
Overall Score
U
SA
Bulgaria
C
osta
R
ica
Ecuador
Tanzania
N
igeria
Lebanon
Country
Global Integrity Index 2007

11. Worldwide Governance Indicators
(WGI)

12. Findings: What Businesses Look
For When Investing in a Country
 Ease of doing
business
 Starting and closing a
business
 Dealing with licenses
 Employing workers
 Registering property
Getting credit
Protecting
investors
Paying taxes
Trading across
borders
Enforcing contracts

13. Comparative Study
 Nigeria
 Federal Republic
 Independence: 1 Oct. 1960
(from UK)
 Population Growth Rate: 2.4%
 GDP- per capita (PPP): $2,200
 Malaysia
 Constitutional Monarchy
 Independence: 31 Aug. 1957
(from UK)
 Population Growth Rate: 1.6%
 GDP- per capita (PPP):
$14,400
 Botswana
 Parliamentary Republic
 Independence: 30 Sept. 1966
(from UK)
 Population Growth Rate: 1.5%
 GDP- per capita (PPP):
$14,700
 Chile
 Republic
 Independence: 18 Sept. 1810
(from Spain)
 Population Growth Rate: 0.9%
 GDP- per capita (PPP):
$14,400

14. Research Questions
 What are the cultural perceptions of
governance?
 Do the people feel the government is corrupt?
 Do they feel it could do more to attract
international investment?
 Are the people interested in attracting more FDI?
 What do business and international
organizations generally define as good
governance?
 What institutions and policies are necessary for
international business and investment?

15. Findings: Cultural Perceptions
 Nigerians still perceive their government to be
corrupt
 Corruption has become an institution, but not a
cultural institution
 Citizens are not seeing improvements, despite
substantial oil revenues
 Calling for improvement of basic conditions
 Unemployment
 Poverty
 Infrastructure

16. Findings: Attracting Business
 Government has been seeking international
investment: China, Libya, India
 Many NMCs still unwilling to make risky
investment
 People and companies seek improvements:
infrastructure, transparency, property rights,
land use
 Trade and imports vs. industry protection
 Benefits of FDI

17. Findings: Good Governance
 Governance process of making and
implementing decisions
 Can be applied to all organizations: political
institutions; local, national, international
governments and corporations
 Several organizations and institutions have
developed guidelines for good governance

18. Findings: Institutions and
Securities
 Common themes among all definitions,
applicable to Nigeria, will address the
corruption problem as well as stimulate
Rule of law
Accountability
Transparency
Participation
Property Rights
Regulation

19. Research Questions
 What are the impacts of corruption?
 How does corruption affect the investment climate
and international business?
 What are the economic and social costs of
corruption?
 What can be quantified?
 How far-reaching are the affects of corruption?
 What is the economic potential of Nigeria?
 With good governance, what kind of investment
could Nigeria expect to attract?

20. Findings: Impacts of Corruption
 Costs higher
 Threatens stability
 Skews development
 Uneven playing field
 Harms reputation and trust in the state
 Deters investment

21. Findings: Costs of Corruption
 Impossible to know exact cost
 Measure erosion of public confidence and gov’t
legitimacy?
 Possible to estimate magnitude of corruption
 Bribes: $1 trillion of $30 trillion world economy
 (World Bank survey, 2001-2002)
 Not counting embezzlement or fraud
 President Abacha: $5 billion (Transparency International)
 Also favors, presents, services
 Halve corruption = 400% increase in
income/capita
 Corruption = 20% tax on foreign investors

22. Findings: Economic Potential
 Strong, large private sector
 Educated professionals
 Many foreign firms already present
 FDI greater than most other African countries
 Many natural resources
 Lots of oil
 Trying to attract more FDI with incentives

23. Conclusions

24. Potential Policy?
 Simplify complex tax
system & customs
 Increase
privatization
 Encourage
democratic
processes: free
press, auditors
 Increase
transparency
 Accountability
 Focus on incentives,
prevention, &
reforms