PwC Submits Report On Impact Of Corruption On Nigeria To Osinbajo

Vice President, Prof. Yemi Osinbajo, at the
Presidential Villa, Abuja over the weekend
received a report titled Impact of Corruption on
Nigeria’s Economy from
PricewaterhouseCoopers (PwC)..

The PwC team led by Mr. Uyi Akpata, Country
and Regional Senior Partner West Market Area,
said that the report centred on the ways
corruption had impacted the Nigerian economy
over time, adding that PwC believes that the
work provides robust evidence and impetus for
reducing the phenomenon in Nigeria.
Akpata stated that “the results of the study
show that corruption in Nigeria could cost up to
37 per cent of Gross Domestic Products (GDP)
by 2030 if it was not dealt with immediately.
This cost is equated to around $1,000 per
person in 2014 and nearly $2,000 per person by
2030. The boost in average income that we
estimate, given the current per capita income,
can significantly improve the lives of many in
Nigeria”.
Five steps where used in the report to estimate
Nigeria’s cost of corruption. The first step was
to examine over 30 studies to understand the
way that corruption affects GDP in Nigeria. The
study was obtained from international
organisations including the OECD, IMF, DFID
and Transparency International and Nigerian
academics affiliated with universities published
by other academics across mediums such as
journals, articles and PhD publications among
others as well as in-house studies assessing
the health of the Nigerian economy such as the
World in 2050 publication. The IMF study was
selected to estimate impact of corruption on
economic growth.
The second step was to identify the impact of
corruption on economic growth using the IMF
study, which estimates that the impact of 1
point change in the corruption index results in a
1.2 percentage point change in economic
growth per annum. The study’s methodology –
calculating impact on growth when a country
moves from its own rank to another country’s
rank on the corruption index was also used.
Transparency International’s Corruption
Perceptions Index (CPI) was also used as a
proxy for corruption; this dataset defines
corruption as the ‘abuse of public office for
private gain’ and the index was categorized into
three parts; Grand corruption, Petty corruption
and Political corruption.
The fourth step in the report created 3
scenarios that show the lower levels of
corruption that Nigeria could have achieved in
the past and can achieve in the future while the
fifth step calculated the impact of corruption on
economic growth and output for each scenario.
According to Dr Andrew S Nevin, (PhD), PwC
Chief Economist and co-author of the report,
PwC formulated the ways in which corruption
impacts the Nigerian economy over time and
then estimated the impact of corruption on
Nigerian GDP, using empirical literature and
PwC analysis.
“We estimate the ‘foregone output’ in Nigeria
since the onset of democracy in 1999 and the
‘output opportunity’ to be gained by 2030, from
reducing corruption to comparison countries
that are also rich in natural resources. The
countries we have used for comparison are:
Ghana, Colombia and Malaysia”, he said.