MSME-related corruption in Nigeria is much more institutionalized than in South Africa, where similar government programs are more transparent, better audited, and subjected to stronger legislative oversight.Anticorruption agencies, meanwhile, have shown little interest in investigating this increasingly prevalent form of corruption. Officials routinely obfuscate and stonewall journalists and civil society groups when asked about these programs. Civil servants, unscrupulous business people, legislators, and even some presidential appointees appear to be complicit. Expansive and complicated, MSME-related corruption rarely grabs headlines, making it an attractive target for Nigeria’s resourceful kleptocrats.1 This exceeds Nigeria’s capital expenditure on health and education combined over the same period. Though difficult to calculate, MSME-related corruption has likely siphoned over $1 billion from Nigerian state coffers between 20.It stymies economic diversification and inflicts lasting damage and opportunity costs on a sector that employs 84 percent of Nigerian workers and contributes roughly 50 percent to Nigeria’s gross domestic product (GDP). Exacerbated by mismanagement and broader policy failures, this form of corruption has disproportionately high multiplier effects.Instead, they are set up to fail-eroding trust in government and functioning as conduits for embezzlement, contract fraud, deliberate waste, and the distribution of political patronage. Relative to their high cost, these agencies’ programs appear to help very few actual small business people. Corruption is endemic within Nigerian government agencies meant to help MSMEs. The Corrosive Effects of Corruption on Nigeria’s MSME Sector Left unchecked, this financial malfeasance will undermine the resilience and long-term prospects of Nigeria’s MSMEs. Such corruption has become routine and widespread, and it has toxic effects on Africa’s largest economy and most strategically important nation. There is an especially damaging but little-studied facet of this threat to Nigeria’s long-term development: corruption involving government agencies and programs created to help MSMEs. Foremost among these is corruption in its many forms. Operating in one of the world’s most difficult business environments, these micro, small, and medium-sized enterprises (MSMEs) face many challenges. These entrepreneurs, whether informal traders, cottage industry workers, and smallholder farmers, collectively power Africa’s largest economy. Nigeria is known globally as a petro-economy but, in reality, it is a country of small business people.
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