Chop My Money

 

 

 

 

Much of the huge appeal of Nigeria’s President Buhari during last year’s electoral contest, revolved around his stare-you-down stance on corruption.

Although it would be erroneous to describe his previous mid-1980s stint in the hot seat, as an unqualified success, many Nigerians look back fondly back on his tough approach to the “abuse of public office for private gain”. Heads did literally get chopped.

As might be expected, there is a straightforward link between more corruption and inferior economic outcomes. That side payment to secure a business license reduces the resources available to build my company, create jobs, and help grow the economy. In turn, this reduces the tax base available for the government to invest in vital infrastructure and healthcare which also inhibits national advancement.

But how much does corruption cost Nigeria? Economists at PricewaterhouseCopers, the business services company, have recently estimated how much larger the economy would be if it had the corruption levels of reputedly less transgressive peers such as Ghana, Colombia and Malaysia.

Although their methods are not foolproof, their conclusion that Nigeria’s economy would have been between 18% and 36% bigger in 2014 is not beyond the bounds of credibility.

Even the lower end of the range equates to giving each of Nigeria’s 170m inhabitants an extra £450 during the year. With any luck, Mr Buhari will have his hands full.

TNT Business

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