Corruption: Governance challenge towards reducing unemployment in Nigeria

• Published date: 01 November 2023
• Author: Fisayo Fagbemi,Adeyemi Fajingbesi,Tolulope Temilola Osinubi
• Date: 01 November 2023
• DOI: http://doi.org/10.1002/pa.2880

RESEARCH NOTE

Corruption: Governance challenge towards reducing

unemployment in Nigeria

Fisayo Fagbemi

1

| Adeyemi Fajingbesi

2

| Tolulope Temilola Osinubi

1

1

Department of Economics, Obafemi

Awolowo University, Ile-Ife, Nigeria

2

National Institute for Legislative and

Democratic Studies, Abuja, Nigeria

Correspondence

Fisayo Fagbemi, Department of Economics,

Obafemi Awolowo University, Ile-Ife, Nigeria.

Email: fisay4real@yahoo.com

The study examines the possibility of having a very low rate of unemployment in

Nigeria, if there is a reduced rate of corruption in the long-term. While using cointe-

gration regressions and Vector Error Correction Mechanism (VECM) over the period

1996–2020, it is affirmed that corruption could increase unemployment rate in the

long run. The two corruption indicators employed (control of corruption and corrup-

tion index) are found to have a substantial effect on unemployment rate. Further evi-

dence confirms that corruption and unemployment are cyclically interdependent.

Findings indeed stress that a high level of corruption is harmful to employment

growth. On the other hand, in the absence of sufficient job opportunities, rent-

seeking government officials would be more interested in collecting bribes from job

seekers, which results in sustained unlawful practices among the public officials.

Thus, adopting effective corruption-control measures is critical. It is therefore sug-

gested that to effectively tackle corruption incidents, there should be incentives for

citizens or public officials to report bribery and the process of reporting corruption

incidents should be further simplified. Strengthening anti-corruption agencies and

developing a sound legal framework that promotes a culture of lawfulness and

impeccable practices in the public sector are central.

KEYWORDS

corruption, economic growth, Nigeria, public sector, unemployment

1|INTRODUCTION

The demonstration of the strongest evidence on the link between

corruption

1

and unemployment

2

can be a critical cog in pushing many

countries to recognize that high corruption levels remain a serious

issue. Such an understanding can help reduce corruption risks.

While problems associated with corruption are particularly acute in

developing economies, the greatest hurdle to socioeconomic develop-

ment across the globe is corruption (Oueghlissi & Derbali, 2021). In

terms of global GDP, about 5% is being dissipated annually due to

corruption (United Nations, 2018). Therefore, the need to mainstream

corruption prevention and control in the labor market should be firmly

established by the literature. Almost all countries that are regarded as

highly corrupt experience dire socioeconomic crises which are usually

a consequence of frustration and discontentment resulting from

unemployment (Chêne, 2014). For instance, in Nigeria, poverty rates

are strongly influenced by unemployment (Danaan, 2018). This is an

indication that unemployment generates poverty, thereby exacerbat-

ing fragile socioeconomic development in developing countries

(Blackburn et al., 2011). Hence, festering corruption and increased

unemployment rate spell doom for Nigeria's efforts towards achieving

the 2030 Agenda for sustainable development.

Nigeria occupies a strategic position in Africa, as the most popu-

lous country in the continent and a very key oil producer. Although

1

The definition of corruption in this study is based on the work of Lim (2018, pp. 2); “public

sector corruption, broadly defined as the illegal or unauthorized profiteering by public

officials abusing their authoritative positions, can manifest in different forms—including

embezzlement of public funds, fraud claims, and direct receipts of bribery—and offers

substantial personal gains at the costs of society.”

2

Unemployment rate is defined as the “ratio of the number of people unemployed to labor

force”(World Bank, 2021).

Received: 3 January 2023 Revised: 16 May 2023 Accepted: 24 June 2023

DOI: 10.1002/pa.2880

J Public Affairs. 2023;23:e2880. wileyonlinelibrary.com/journal/pa © 2023 John Wiley & Sons, Ltd. 1of12

https://doi.org/10.1002/pa.2880