Nigeria Lost $174 Billion To Corruption In 2015 – Report

Unless the country radically reforms its public and private sector administration, Nigeria may lose as much as 37 percent of its total GDP by 2030, says Pricewater Cooper, PwC, leading audit, assurance rating company by global acclaim.

By its estimation, the cost of such loss per capital, that is, on every Nigerian of the estimated 174 million, is put at $1, 000 as at 2014, to increase to $2,000 by 2030. 

The leading professional services company, yesterday, made this presentation while presenting a report titled ‘Impact of Corruption on Nigeria’s Economy’ to the Vice President, Prof. Yemi Osinbajo, at the Presidential Villa, Abuja.

The leader of the PwC team, who is also the Country and Regional Senior Partner West Market Area, Mr. Uyi Akpata, told the Vice President that the report centered on the ways in which corruption had impacted the Nigerian economy over time, adding that PwC believes that the work provides robust evidence and impetus for reducing corruption in Nigeria.

Akpata disclosed that the results of the study showed that corruption in Nigeria could cost up to 37 per cent of Gross Domestic Products (GDP) by 2030 if not dealt with frontally.

According to him, the estimated cost of the social vice is equated to around $1,000 per person in 2014 and nearly $2,000 per per-son by 2030. Akpata, explained that the boost in average income estimated by the global professional services provider given the current per capita income, can significantly improve the lives of many in Nigeria Clarifying further, the PWc team leader said that the estimate of Nigeria’s cost of corruption report derived from five steps namely, examination of over 30 studies to under-stand the way that corruption affects GDP in the country; identification of the impact of corruption on economic growth using the IMF study; and use of Transparency International’s Corruption Perceptions Index (CPI) as a proxy for corruption.

Others are, the creation of three 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 An-drew S Nevin, 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 ‘fore-gone 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 clarified. The report noted that corruption remained a pressing issue in Nigeria which affects public finances, business investment as well as standard of living. It listed three dynamic effects of corruption to include; Lower governance effectiveness, especially through small-er tax base and inefficient government expenditure.

PwC studies estimate Nigeria’s tax revenues at 8 per cent of GDP, which is the lowest for comparison countries; weak investment, especially Foreign Direct Investment explaining that it’s harder to predict and do business under such circumstances.

It also reported that also affected was the nation’s lower human capital as fewer people, especially the poor, are unable to access healthcare and education.