This particular chapter from the book, The Prosperity Paradox, written by Clayton Christensen, Efosa Ojomo, and Karen Dillon opened me to a new perspective on corruption in Nigeria so I decided to share.
Nigeria is still far away from being described as a prosperous country. In fact, the report published by World Poverty Clock describes Nigeria as the poverty capital of the world. This is not a great report for the giant of Africa.
Corruption has been tagged as the number one hindrance to prosperity in Nigeria. Nigeria currently ranks 146 out of 180 on the corruption perception index which was published by Transparency International with 180 being the most corrupt. Over $400 billion has been lost to different forms of corruption since 1960.
Many believe that this hydra-headed menace is responsible for all the evils that have befallen us as a nation. And maybe they are not wrong.
However, this chapter posits that countries can advance despite corruption including offering fresh perspectives on how we can combat corruption.
Most of us are beneficiaries of the corrupt system
Often times, we fall into the error of thinking that politicians and leaders are the culprits. However, the truth is that almost every Nigerian is corrupt. It has become an integral part of our system and its now more like a culture.
- Petty theft: this includes practices like stealing from organizations like public hospital supplies to sell for personal gains.
- Grand Theft: embezzlement of large public funds, misappropriation of funds as we see in Nigerian politicians.
- Speed Money: is the extra money you pay to the passport officials to hasten your passport process or the money you pay to jump a queue. Not forgetting bribing the police for favors
- Access money is the money the rich people or the elites pay to the government (most times) to get deals such as government projects. Or money paid to influence policies in their favor.
Most of us have benefitted from the corrupt system in Nigeria that it is almost hard to imagine another way of life including the so-called “good people” or “morally upright”.
We have witnessed many anti-corruption measures, schemes, and intervention but most of these have been a game of whack-a-mole. Some of these enforcement agencies that have been established have become corruption commissions.
Efosa calls for a rethink on how corruption is viewed as a nation.
The conversation on corruption starts from understanding the reason or root cause. We would have to ask ourselves why people especially those in developing countries take part in corruption.
Efosa highlights three major reasons why people hire corruption. I personally think the first and second points are similar.
- People hire corruption because they want access to the basic things of life. They want to be able to feed their families, go on vacations, and see their children through school.
And when society offers us a few legitimate options to make, corruption becomes attractive
In more developed climes, you have access to these things. A policeman would carry out his duties dutifully because he is not thinking of where to get his next meal from. His salary can provide the basic things he needs to survive. Have you tried offering bribes to policemen in developing countries?
Conversly, a Nigerian policeman who has a hard time feeding his wife and five kids because his meager salary has not been paid for two months would succumb more easily to bribes. He would not even think twice about it. He has to survive.
2. Similar to the first point is the fact that every individual has a cost structure. That is, a particular amount they need to maintain a particular lifestyle. For example, an average young person needs money for rents, clothing, internet, and food. When the money you earn is below your cost structure, then seeking other corrupt means will be an alternative.
3. According to research, obeying the laws of the state require great efforts. Human beings will most likely make the best decisions for themselves in the circumstances. That is, people will consciously make bad or corrupt decisions when they know they can get away with it. And guess what, you can get away with a lot of things in Nigeria.
The truth is it may be impossible to totally eradicate corruption in every system. Even advanced countries still battle corruption. No one has it all figured out. However, at the moment, some societies are saner than others.
But these seemingly saner climes never became so overnight. They evolved. Efosa describes three phases/stages that countries undergo in the journey to becoming a transparent system and gave examples of countries in these stages.
Phase 1: Overt and Unpredictable.
Countries in this phase are known for extreme cases of corruption. Such regions are highly volatile and unpredictable. The flow of foreign investment in countries like this is extremely low because of the uncertainties in the business clime.
People steal public funds openly and go unpunished in regions like this. Corruption is practiced openly without remorse.
Instituting new laws in countries in these regions are almost futile because these countries cannot properly enforce the law. Law enforcement is very expensive and most of the countries in this region cannot afford a proper enforcement agency. Furthermore, some individuals in countries like this are above the law.
Most poor African countries including Nigeria are presently in this phase.
Examining previous solutions
Although there has been mass protests and campaign against corruption, the results have not been as fruitful.
In fact, some of these anti-corruption protests lead to the installation of new candidates that promise eradication of corruption but as we have seen from history, the voters end up getting disappointed. Russia’s Vladimir Putin and Nigeria’s President Buhari came into power promising to end corruption.
Good Governance/good intentions do not change the corrupt system as seen in countries like South Africa. Nelson Mandela is one of the world’s most admired leaders. To date, people talk about him in awe as he embodied great leadership traits. But his good intentions and good leadership did not automatically lift South Africa out of its corrupt state. In fact, after he stepped down, the country got worse under his successor Jacob Zuma, known as Teflon president.
It, therefore, means that eliminating corruption is not about having leaders with good intentions. Although that is certainly part of it.
Phase two: Covert and Predictable
To better understand this stage of corruption, let us examine some statistics.
Corruption costs the Chinese government 86 billion dollars annually. This is more than the GDP of sixty one countries. About one trillion dollars have left the country and some of the funds have been linked to government officials including the president’s brother-in-law.
This means in plain terms that China is a corrupt country. But there is also something to note about China. That, in the midst of this outrageous corruption, China’s GDP per capita has grown from 112 dollars in 1970 to about $9,800.
China has grown at an annual average rate of more than 10% accounting for about 40% of world growth. Despite the growth China has experienced, China still ranks 77th out of 180 countries on Transparency International’s corruption Index.
We can observe that China experiences a high level of economic growth despite the rate of corruption.
Countries become better despite corruption.
Phase 3: Transparency
Although imperfect, America is an example of a transparent system. America ranks 16 out of 180 countries on the index. The American system is structured in a way that corruption is exposed, prosecuted, and punished publicly.
But America was not always like this. In the nineteenth century, corruption was very pervasive in the United States. American politician, Magear “Boss” Tweed, exemplified the modern-day corrupt third world politician. Tweed was overtly corrupt and he stole lots of money from public funds.
Corruption also found roots in major infrastructure projects like roads, rail, etc. Some contractors used materials that were below par and there were other open corrupt practices.
The Journey to a More Transparent System
Efosa argues that as more Americans got richer or created wealth, people found better options for living life.
They became wealthy by investing in market-creating innovations. Inventions like Henry Ford’s Ford cars increased economic growth.
More jobs were created, more Americans could now afford cars, more roads where developed and more parents could afford to take their children to school, etc. Therefore, corruption became a foregone alternative.
It is important to note that these inventions were not created by the government but by individuals.
In Nigeria, startups like Andela, Paystack, etc have created jobs that never existed some ten years ago. These companies drew in foreign investment and created more quality jobs as a result. Just ten years ago, the job options for an average Nigerian youth were limited. There is now an increasing demand for data scientists, software engineers/developers, product managers, social media managers, etc.
When there are few alternatives to help people progress, corruption often stands out as the most viable option.
But when a better way presents itself, the process that leads to transparency begins.
Asking people to fire corruption without giving them anything else to hire is not realistic.
Investing in more market-creating innovations will see more people drawn out of poverty and corruption will become less of an alternative.
At the risk of sounding too optimistic, I think we are on the path to firing corruption with the current stream of ideas enabled by technology.
Societies are able to reduce corruption because they developed.
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