Corruption and Underdevelopment in Africa
Corruption and Underdevelopment in Africa
Corruption and Underdevelopment in Africa
Abstract
Africa is endowed with abundant natural resources and it has attracted development aid from
the rich nations of the world. Despite these, the continent remains undeveloped. Different
reasons have been attributed to the African development crisis among the modernist school and
the dependency school. This study was undertaken to unravel the cause of the African
underdevelopment. The paper pinpoints that corruption is the core reason behind African
underdevelopment and it laid emphasis on corruption and underdevelopment interface in
Nigeria. For Africa to break the impasse of underdevelopment, the paper calls for good
governance and the establishment of special agencies to monitor all development projects
undertaking by African countries.
INTRODUCTION
The attempt by countries in Africa to break the cycle underdevelopment has been hindered by
the high level of corruption in the continent. Africa is rich in natural resources and the proceeds
from the sales of these natural resources to other countries are mismanaged by African leaders
through corrupt process. Transparency International defines corruption as the abuse of
entrusted power for private benefit (Transparency International, 2006). Since the early 1960s
when most African countries were gaining independence, the rich nations of the world have
extended development aids to Africa, yet Africa remains the lease developed continent in the
world. Different schools of thought have come out with the causes of underdevelopment in
Africa. For instance, the modernist school believes that Africa needs to follow the development
part of the industrialized nations before it can develop. On the contrary, the dependency
theorists argued that the exploitation of African by the superpowers was responsible for African
underdevelopment. However, there is the new school of thought that postulates corruption in
Africa hinders development. Corruption affects the development in various ways. For example,
billion of dollars that would have been used to provide social amenities in some African
countries such as Nigeria are siphon and kept in foreign accounts. The former World Bank
president, Paul Wolfowitz revealed that public officials in Nigeria have embezzled more than
$300 billion from the nations pulse for the past forty decades (Ndibe, 2006). This statement was
supported by the former chairman of the Economic and Financial Crimes Commission (EFCC),
Nuhu Ribadu and the former World Bank Vice President for Africa, Oby Ezekweili who stressed
that Nigerians leaders have stolen over $400 billion from the sales of crude oil since
independence. The over $400 billion that has been stolen from Nigeria would have impacted the
development progress in Nigeria if such a huge amount has been channelled to aid
development. Tanzi and Davoodi (1997) detect four outlets through which corruption may have
an adverse effect on economic growth: higher public investment, lower government revenues,
lower expenditures on business operations and maintenance, and lower quality of public
infrastructure. According to Uneke (2010):
Corruption, because of its pervasiveness in many countries in Africa South of the
Sahara, is detrimental to social, political, and economic development in a variety of ways. A
program of sustainable development is contingent on several conditions, including principled
and purposeful leadership; prudent, rational and far-sighted decision-making; and optimum use
of available resources. Corruption tends to undermine all these conditions in terms of public
cynicism and erosion of confidence on corrupt leadership; irrational, short sighted and ill-
motivated decision; and squandering of resources on ill-advised or unsuitable projects. The
result has developmental stagnation, poverty, the cynicism of the political leadership, and
disillusionment and hopelessness on the part of the masses and the deprived
The aim of this paper is to elucidate on the correlation between corruption and
underdevelopment in Africa. Section 1 of this paper is the introduction. Section 2 and 3 are the
literature review and the attempt by African countries to escape underdevelopment respectively.
Section 4 is how corruption underdeveloped Africa, While section 5 is the conclusion.
REVIEW OF LITERATURE
The debate on the impact of corruption on African development continues to wax stronger in the
academic cycle. Why some scholars have argued that corruption hinders development because
it makes resources ineffective and alter economic growth (Scheifer and Vishny, 1993). On the
contrary, others economic experts have stressed that corruption may be economically viable in
some instances (Acemoglu and Verdier, 1998). As the debate rages on, some research findings
of scholars further provide arguments for the empirical evidence views on the connected issues
regarding the impact of corruption on development (Bardhan, 1997; Wei, 1998; Aidt, 2003;
Drexer and Herzfeld, 2005). Mauro (1995) detects the impact of corruption on economic
development using statistics from 67 countries. He discovers corruption decreases private
investment which adversely affect economic development. In a subsequent study on, Mauro
(1996) investigates the effect of corruption on investment, economic growth and government
expenditure in 101 countries using cross-country data. In correlation with his previous study, he
established that corruption harmfully affects economic growth basically of decreasing private
investment and altering the structure of government expenditure, thereby reducing the
budgetary allocation to the education sector. Li et al. (2000) examine the impact of corruption on
income and Gini coefficient of income distribution using statistics from Asia, OECD and Latin
America. From their study, they found that corruption rises the Gini coefficient in a quadratic
way, that is, the Gini coefficient is higher in countries with a middle level of corruption while
countries with a low or high level of corruption have a lower Gini coefficient. Gupta et al. (1998)
identify that corruption increases income inequality in some developing countries. This can be
said of most of the African countries that corruption is prevalent. In the their empirical findings,
they also noticed that an increase in corruption is related to the decrease in the financial
allocations to the education and health sectors. Hendriks et al. (1998) and Johnson (1989)
pinpoint from their preliminary findings that the distributional impact of corruption and tax
evasion are regressive which in a way increase inequality. The rise of poverty and inequality
have been blamed for most of the conflicts in Africa. Still on the impact of corruption on
development in Africa. Tanzi and Davoodi (1997) x-ray the process through which corruption
influenced economic growth using cross-country information. They discovered corruption
impacted negatively on public investment, reduces government income, decreases expenditure
on operations and maintenance and reduces the quality of public amenities. Furthermore, their
empirical findings indicated that corruption increases public investment and lowers its
productivity. Ehrlich and Lui (1999) explore the interface between corruption, government and
economic growth using a data that involved 68 countries. Their findings revealed that there are
changes in both government size and corruption harmfully affect the level of per capita income.
Mo (2000) investigates the effect of corruption on the growth of the economy and the means
through which it impacts growth. He established that a 1% rise in the level of corruption
decreases the growth rate by 0.72%. In addition to this, he found that corruption reduces the
level of human capital and the share of private investment. Blackburn et al. (2005) devise a
hypothetical relationship between corruption, economic development and other variable using a
dynamic general equilibrium version of economic growth. The version identified that the
interface between corruption and economic development is both negative and two-ways casual.
Buse and Hafeker (2006) examine the relationship between institutions, political risk and foreign
direct investment inflow using cross-sectional and cross-sectional time-series. Their
investigation of 83 developing countries showed that the government, stability, conflicts,
corruption and ethnicity, law and order and democratic accountability of government are
extremely significant determinants of foreign investment. For instance, in the most prone conflict
parts of Africa, foreign investments are scarce in those areas. A case in point is that in Nigeria,
economic experts have warned that the activities of Boko Haram insurgency and the kidnapping
of over 200 schoolgirls threaten foreign investment in the country. Some of the evidence
mentioned in the literature review may not be applicable to Africa. However, they offer some
directions as to the procedures to which corruption impacted economic development negatively
(Gyimah-Brempong, 2002).
Import-Substitution Model
This is an economic and trade policy that discourages the importation of foreign goods and the
encouragement of local production for exportation. The challenge of development that was
confronting developing countries prior to independence prompted these countries to enact this
development policy. This policy has made some of the Latin American countries such as
Argentina, Brazil and Mexico to be emerging developing economies of the world. After most of
the colonial masters have left Africa, the continent began to experience lots of social, economic
and political challenges. To break away from these challenges, majorities of the emerging
African leaders incorporated the Import-Substitution Industrialization Strategy. It must be noted
that, in the Sub-Shara Africa, the government took up the leadership of a total underdeveloped
economics with lack of public finance and without vital institutions to run the government, as well
as the lack of human and physical capital (World Bank, 1994). According to Kilby (1975);
Mkandawire and Soludo (1999) stress that the import substitution model was the original
industrialization policy that the African governments have initiated to encourage production
thereby increasing economic growth. However, this policy failed in addressing African
development challenges. One reason for this according to Vitta (1999) is that with the
urbanization of many cities, there was an increase in the demand for agricultural goods either as
food for the increasing urban population or as raw materials for local industries. The low
productivity due to crude implements in the agricultural sector did not allow the increasing
demand to be met which eventually caused food safety in many African countries going by the
Food and Agriculture Organization (FAO) in 1984.
same level of development with most African countries can now become the leading emerging
economies of the world, then something is amiss with Africa. Water Rodney claimed that the
underdevelopment of Africa was as a result of the exploitation of the continent by the European
power through colonialism, capitalism and imperialism (Rodney, 1982 cited in Omotoye, (n.d).
This is acceptable in the colonial era, however, African states ought to have changed for the
better after many years of political independence. For example, Nigeria has been facing
development crisis for more than half a century (Omotoye, n.d). The major reason behind this is
the high level of corruption in the country (ibid.). New political thinkers in Africa have blamed
corruption by African leaders for the underdevelopment of the continent. Huge sum of money
that would have been used to provide infrastructural facilities are stolen by African leaders and
send to Western countries for safe keeping at the expense of African development. It was
evaluated that the sum of $30 billion aid to Africa ended up in overseas bank accounts (Celarier,
1996). This statement was also corroborated by the United Nations (UN) and the Africa Union
(AU) who stressed that an estimated sum of $148 billion is embezzled in Africa yearly by
political leaders, multinational companies, business executives and the civil servants with the
aid of financial institutions the Europe and North America (Adusei, 2009). In Nigeria, former
chairman of the anti-corruption agency, Nuhu Ribadu and the former education minister Oby
Ezekwesili accused Nigerian leaders of stealing over $400 billion from the federal government
account since 1963. $400 billion would provide Nigeria with good road networks, well-equipped
modern hospitals, power generating stations and functional oil refineries. Since 1960 that
Nigeria got her independence, the government hospitals are just consulting rooms because the
facilities are moribund, bad road networks and poverty have been increasing at an alarming
rate. Corruption could be attributed to the present state of underdevelopment in Nigeria.
Bamidele (2013) posits:
Corruption in Africa slows down development. One of the most widely discussed consequences
of corruption is the distortion of African government expenditure. This often results in public
money being wasted on white elephant projects, rather than people-oriented programmes such
as health and education. As a result, more opportunities are presented for corrupt use or
diversion of funds. Raising the ethical standards of governance can lead to many benef its
especially for the economic, political and social development of a country. Fighting corruption
and promoting good governance in Africa is therefore crucial to developing an environment that
facilitates the social, political and economic development of the African people
Corruption remains the main cause of underdevelopment in Africa. This can be attested to by
the massive looting of public funds by African leaders. Ayittey (2000) gave a breakdown of
funds that have been stolen by some African Head of States:
Nigeria has 112 million poor people (NBS, 2010), 100 million Nigerians live in destitution (World
Bank, 2013), the third country in the world with a large number of poor (World Bank, 2014). The
irony of this is that Nigeria with a very low standard of living, the federal lawmakers earn more
than lawmakers of countries mentioned above with a good standard of living. According to
Nigerian Professor Ibrahim Gambari, the Special Advicer on the International Compact with Iraq
and Other Issues for the Secretary-General of the United Nations in 2008, berated the Nigerian
lawmakers for their dishonest ways of increasing their salaries which according to him affect the
provision of good roads, railway system, power supply and capital projects. The high level of
political corruption and its aftermath effect on the nations development prompted the Obasanjo
government to establish the Economic and Financial Crime Commission (EFCC) in 2004.
Mohammed (2013) gave a summary of details of political corruption cases be handled by the
EFCC.
These are high profile corruption cases that involved huge sums of money, most of the accused
persons are past governors and ministers of the federal republic of Nigeria. If this massive
amount would have been channelled for the provision of amenities in the country, Nigeria would
not have the problems of erratic power supply, bad roads, poor health services, insecurity, high
rate of poverty, high level of unemployment and the high rate of dropout of school-aged
children.
In another development, corruption has been blamed for the insurgency that is
threatening the co-existence of Nigeria has a nation, notable personalities such as Noble
laureate, Professor Wole Soyinka and the former United States President Bill Clinton have said
that political corruption is responsible for the high level of insecurity being experienced in the
northern part of Nigeria. In a similar same vein, the United State Under Secretary for State for
Civilian Security, Democracy and Human Right, Sarah Sewall has stressed that corruption is the
main obstacle to the fight against the insurgency group, Boko Haram, according to her, despite
Nigerias $5.4 billion security budget for 2014, corruption prevent supplies as basic as bullets
and transport vehicles from reaching the front lines of the struggle against Boko Haram (Ameh
and Oladimeji, 2014). The military has come out to say lack of weaponry stall their fight against
Boko Haram, which prompted the federal government to make a proposal to the Nationa
Assembly for the approval of $1 billion for the procurement of military hardware. The question
that was asked by the renowned Human Rights lawyer and Senior Advocate of Nigeria (SAN)
Femi Falana, what has happened to the budgetary allocations to the Defence Ministry in the
past. Just as Nigerians are still debating the issue of the $1 billion, the South African
government impounded a private jet from Nigeria that is owned by one of the popular pastor in
Nigeria, Ayo Oresejafor with $9.3 million. The Nigerian government said the money was meant
for the purchase of arms to fight Boko Haram, but the South African government sees the
confiscated money as an act of money laundering. If the Nigerian government claimed the
money was meant for arms, why did the government not follow due process to buy arms from
overseas instead of stuffing $9.3 million on a private jet with two Nigerians and an Israeli? The
Lagos State governor, Babatunde Fashola, stresses that the $9.3 million confiscated by the
South African authority has made Nigeria a laughing stock globally. On his part, with reference
to the seized $9.3 million, the former Archbishop of Lagos, Anthony Cardinal Olubunmi Okojie
posit that:
Corruption is in every nation but Nigerias own is number one. I am telling you. And if we
are not careful, this nation will go down the drain. Now, people cant help you to bring something
from that corner without asking for remuneration. Look at so many children and youths who
have no school to go to, or no money to pay school fees, and there are rich men who parade
themselves up and down the place as rich people. For what? They seem to have forgotten that
this life is not the end. Nobody chose his parents, and nobody came into the world with a gold or
silver spoon. The $9.3 million can build hospitals, roads, schools, supply water, drugs and
restore some of the capital infrastructures that have been dead for a while.
CONCLUSION
Corruption has been seen as inimical to African development. However, some African leaders
have established anti-corruption agencies to checkmate the monster called corruption in order
to move their various countries forward. Some opposition parties and some of these African
countries have accused the reigning governments for using the anti-corruption agencies to
harass opposition candidates why those that are close to the city of power are left the hook
when they are involved in corruption cases. Nigeria and Kenya are the good examples of this
scenario. For example, in Nigeria, the Kano and Jigawa governors that are opposed to the
second term bid of President Jonathan have been harassed by the government security
apparatus. Why the Kano state governor was having a meeting with some other governors in
the Kano liaison office in Abuja was stopped by security operatives and the Kano State House
of Assemble leaders was invited for questioning by the EFCC, his counterpart from Jigawa
states, Sule Lamido have his two sons being investigated for money laundry. Whereas, the
former governor of River state that has been accused of looting the state during his tenure as
governor is walking as a free man because he is in the good book of those in authority. For
Africa to break the impasse of underdevelopment, the leaders should incorporate good
governance and tackle corruption in all ramifications. Furthermore, special agencies should be
established to monitor, evaluate and process the execution of developmental projects, this will
go a long way in addressing the deficit in social amenities for the African populace.
REFERENCES
Acemoglu, D. & Verdier, T. (1998). Property rights, corruption, and the allocation of talent: A General
Equilibrium Approach. The Economic Journal, 113 (September), pp. 1381-1403.
Adusei, L. A. (2009). Hiding Africa's Looted Funds: The Silence of Western Media. Retrieved from
https://wikileaks.org/wiki/Hiding_Africa's_Looted_Funds:_The_Silence_of_Western_Media
Aidt, T. S. (2003). Economic analysis of corruption: A survey. The Economic Journal. 632-652
Ameh, J. & Oladimeji, R. (2014). Corruption Stalls Nigerias War Against Boko Haram-US. Retrieved from
http://www.punchng.com/news/corruption-stalls-nigerias-war-against-bharam-us/
Ayttey, G. (2002). Biting Their Own Tails: African Leaders and the internalist intricacies - of the Rape of a
Continent. A Keynote Address to SORAC, Nov. 7-9, 2002 - New Jersey
Bamidele, O. (2013). Corruption, Conlict and Sustainable Development in African States. The African
Symposium: An online journal of the African Educational Research Network. 1-13
Bardhan, Pranab (1997). Corruption and developments: A review of issues. Journal of Economic
Literature. Vol. XXXV, pp. 1320-1346.
Blackburn, Keith, Niloy Bose and M. Emranul Haque (2005). The incidence and persistence of corruption
in economic development. Journal of Economic Dynamics & Control, Vol. 30, pp. 2447-2467.
Bryceson, D., Sarkar, P., Fennel, S., Singh, A. (2010). Globalization, Structural Adjustment and African
Agriculture: Analysis and Evidence. Centre for Business Research, University of Cambridge Working
Paper No. 414.
Busse, M. & Hefeker, C. (2006). Political risk, institution and foreign direct investment. European Journal
of Political Economy, forthcoming.
Dreher, A. & Herzfeld, T. (2005). The economic costs of corruption: A survey and new evidence. Working
Paper, University of Konstanz, Germany.
Ehrlich, I. & Lui, F.T. (1999). Bureaucratic Corruption and Endogenous Economic Growth. Journal of
Political Economy. 107(6): S270S293
FAO (1984). Food and Agricultural Organization, Report.
FAO (1999). The Effect of Structural Adjustment Programmes on the Delivery of Veterinary Services in
Africa. Animal Production and Health Division. Retrieved from
ftp://ftp.fao.org/docrep/fao/010/ah933e/ah933e.pdf
Gupta, S., Davoodi, H., Alonso-Terme, R. (1998). Does Corruption Affect Income Inequality and Poverty?
IMF Working Paper No. WP/98/76
Gyimah-Brempong, K. (2002). Corruption, economic growth, and income inequality in Africa. Economics
of Governance. 184-209
Hendriks, J., Keen, M., Muthoo, A. (1998). Corruption, Extortion and Evasion. University of Exeter,
Department of Economics Discussion Paper No. 98/09
Johnston, M. (1989). Corruption, Inequality, and Change. In Ward, P. M. (ed.), Corruption, Development,
and Inequality: Soft Touch or Hard GraftRoutledge, London
Kilby, P. (1975), "Manufacturing in Colonial Africa", in DUIGNAN, P. & GANN, L., H., (eds.), Colonialism
in Africa, 1870-1960, Vol. 4, London: Cambridge University Press.
Li, H., Xu, L. C., Zou, H. (2000). Corruption, Income Distribution and Growth. Economics and Politics 12
(2): 155185
Lubeck, M. P. (1992). The Crisis of African Development: Conflicting Interpretations and Resolutions.
Annual Review of Sociology. 519-540.
Mauro, P. (1996). The effects of corruption on growth, investment, and government expenditure,
International Monetary Fund, Working Paper No. 98.
Mauro, P. (2006). Corruption and growth, The Quarterly Journal of Economics, Vol. 110, No. 3, pp. 681-
712.
Mkandawire, T. & Soludo, C. C. (1999). Our Continent, Our Future: African Perspectives on Structural
Adjustment", Trenton, NJ: Africa World Press.
Mo, P. (2001). Corruption and economic growth. Journal of Comparative Economics, Vol. 29, pp. 66-79
Mohammed, U. (2013). Corruption in Nigeria: A Challenge to Sustainable Development in the Fourth
Republic. European Scientific Journal. vol.9, 118-137.
Ndibe, O. (2006). A nation of big divine thieves, The Guardian Newspapers (Thursday, October 26).
Lagos: Nigeria.
Noorbakhsh, F. & Noorbakhsh, S. (n.d). The Effects of Compliance with Structural Adjustment
Programmes on Human Development in sub-Saharan Africa. Retrieved from
http://www.uib.cat/depart/deaweb/smed/pdf/Noorbakhsh.pdf
Omotoye, R. (n.d). Corruption and Underdevelopment: The Nigerian Experience. LUMINA, Vol. 22, No.1,
ISSN 2094-1188
Rodney, W. (1982). How Europe Underdeveloped Africa, Enugu, Ikenga publishers, 1982, 22.
Shleifer, A. & Vishny, R. W. (1993). Corruption. The Journal of Economics, Vol. 108, No. 3. 599-617.
Tanzi, V. & Hamid, D. (1997), Corruption, public investment, and growth, International Monetary Fund,
Working Paper No. 139.
Transparency International: The Global Coalition against Corruption (2006). TI 2006 Corruption
Perceptions Index. Berlin: Germany.
Uneke, O. (2010). Corruption in Africa South of the Sahara: Bureaucratic Facilitator or Handicap to
Development? The Journal of Pan African Studies, vol.3, no. 6. 111-128.
Vitta, P. B. (1990). Technology Policy in Sub-Saharan Africa: Why the Dream Remains Unfulfilled. World
Development, Vol. 18, N 11, p. 1471-1480
Wei, S. (1998). Corruption in economic development: Beneficial grease, minor annoyance, or major
obstacle? Mimeo. Harvard University and National Bureau of Economic Research
World Bank, (1994). "Adjustment in Africa: Reforms, Results and the Road Ahead", A World BANK Policy
Research Report, Washington, DC: The World Bank.