Corruption: Governance challenge towards reducing unemployment in Nigeria

Abstract

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 cointegration 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 corruption index) are found to have a substantial effect on unemployment rate. Further evidence 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 suggested 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.