Corruption is one of the major economic evil in hampering economic growth in almost all countries in the world especially in Africa. It undermines development by weakening the institutions on which economic growth depends (Klitgaard 1988). Richards et al (2003); Kofele-kale (2006) highlighted that corruption has become an endemic problem and has affected the region’s economic performance negatively. This evil has fuelled inequality, injustice, low government revenues and is a major catalyst for a viscous circle of poverty, increased cost of doing business and company closures in the region. It is one of the reasons why poverty has found leverage in the region. SSA dysfunctional government’s policy which generates economic rents, greedy political leaders, influence peddling and nepotism has led to the manifestation of corruption. Corruption cost more than 5% of global GDP (World Economic Forum), while annual paid bribes are over $1 trillion. Sub-Saharan Africa continues to face intense corruption calamities. Every year Africa loses $148 billion to corruption actives (Danilo, Mladen and Dusan, 2016). The corruption crisis has limited the capacity of this region to grow as well as to develop. It undermines the healthy status of the poor populace through forcing them to pay bribes for essential free public services. Wei (2000) found that highly corrupt nations tend to have poor economic performance and this is the case prevailing in SSA, where 80% of the total population live on less than $2 a day (World Economic Forum, 2015). The study used secondary data to estimate the impact of corruption on economic growth in SSA. It also used panel data for 44 nations in the region for the period 2006 - 2017. The most advantageous reason of using panel data is that it allows controlling for variables that cannot be observed or measured such as cultural factors as well as take into account variables that varies with time across countries. Thus it takes into account for individual heterogeneity. The corruption data was sourced online from Transparency International, democratic index and other variables was sourced from World Bank. Corruption, military expenditure, literacy rate and democracy have a significant impact on economic growth in Sub-Saharan Africa. The results obtained using panel data methodology confirms the hypotheses that corruption has negatively affected SSA economic growth, whereas literacy rate and democracy enhances economic growth between 2007 and 2016. In addition, the research findings have policy implications and the results are the bases of policy recommendations.
Volume 11 | 08-Special Issue
Pages: 1527-1537