Volume 1, Number 2


Corruption, money laundering and their debilitating consequences for less developed countries (LDCs): the Nigerian experience
Ikechukwu, A.A.

The perennial underdevelopment of many Less Developed Countries (LDCs), some of which have huge sources of revenue like Nigeria, motivates this study. The study identifies corruption and money laundering as possible culprits in this state of affairs. It therefore examines theoretically the implications of corruption for the LDCs and investigates the link between corruption and money laundering. It goes further to empirically verify the relationship between corruption and economic growth in Nigeria. Data on corruption obtained from Transparency International is used. The Central Bank of Nigeria (CBN) is the source of economic variables’ data, which includes Gross Domestic Product, government debt, government revenue, private savings, manufacturing capacity utilization, exchange rate, prime lending rate and inflation. Ordinary least square regression technique is adopted to analyze data after stationarity of the variables was established using Augmented Dickey Fuller test. Corruption relates adversely with most economic variables examined except in the case of GDP growth rate where obtained results are contrary to theoretical speculations. The study therefore recommends the adoption of more radical and innovative approaches to fighting corruption and the cooperation of developed countries to fight the menace of money laundering in LDCs.

Keywords: Gross Domestic Product, exchange rate, prime lending rate; corruption