CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF STUDY

One of the greatest threats to economic and political development of any nation is corruption (Mohammed, 2013). Corruption has been identified as one major obstacle militating against rapid growth and development of the Nigerian economy (Nagari, Umar & Abdul, 2013). It undermines good government, fundamentally distorts public policy, leads to the misappropatriation of resources, harms the private sector and private sector development, and particularly it hurts the poor (Ajao, Dada & Olaoye, 2013). They also state that as a result of the negative effects of corruption on development, Nigerian government and international organizations seek for solution on how to combat the menace. Researchers has that corrupt practices have been perpetrated in governance, public and private places since the pre- colonial era to the colonial period and through independence to present Nagari et al., 2013). Corruption is an ancient practice that has been traced back to pre-biblical time and made itself known in the ancient civilizations of developed and developing countries (Nwankwo, 2014). Corruption is a disease, which eats into political, cultural and economic growth of any country and destroys the functioning of various organs of the government.

The rise of public administration and discovery of petroleum and natural gas are two major events seen to have led to a litany of ignoble corrupt practices in the country (Wikipedia, 2014). Corruption steals money social programmes and services through bribery, kickbacks and inflated pricing of contracts and public projects (Obioma, 2012). He also notes that corruption breeds crises in the country turn out to constitute some of the greatest dangers to the security of the nation.

The level of corruption and poor governance prevailing in the Nigerian system still remain high, albeit there are so many efforts by economic and financial crime commission (EFCC), independent corrupt practices and related offences commission (ICPC), Transparent international, World Bank and many other organizations to reduce it (Akinwale, 2012).

Baghebo and Atima (2013) stress that since the Royal Dutch shell discovered oil in the Niger Delta in 1956, precisely in Oloibiri, in Bayelsa state, the oil industry has been marred by political and economic strife largely due to a long history of corrupt military regimes, civil rule and complicity of multinational corporations, notably Royal Dutch Shell.

Ribadu (2006) as cited in Ajao, Dada and Olaoye (2013) say that the history of corruption in Nigeria is strongly rooted in the over twenty nine (29) years of military rule, out of forty six

(46) years of her statehood since 1960. According to him, successive military regimes subdued the rule of law, facilitated the wanton, looting of the public treasury, decapitated public institutions and free speech and instituted a secret and Opaque culture in the running of government business. The result was total insecurity, poor economic management, abuse of human rights, ethnic conflicts and capital flight. Prior Studies have looked at corruption in Nigeria (Bakare, 2011. Lawal & Victor, 2012; Ogundiya, 2009; and Mohammed, 2013). However, no   prior       study has  focused on corruption in the oil     and  gas  industry in Nigeria. Hence there is need for this study.

The focus of the exercise is on corruption in the oil and gas industry in Nigeria, keeping constant the existence of corruption in the other aspects of the Nigerian society economic, social, political, religious, academic institution and corruption in the services, etc. the nature, types, consequences, efforts made to reduce corruption in the oil and gas sector in Nigeria

  1.2 statement of problem

over the years the oil sector has really being the major source of Nigeria source of income. Nigeria participated fully in forex because of the oil export, but today there has being a huge drop in the price of oil in Nigeria. it is believe that usa patronizes the Nigeria oil sector are no longer buying from Nigeria; reason is because more oil sectors has being discovered, and these oil sector sell at a subsidized rate compare to Nigeria. so for the country to remain in business the price of oil must drop. voices were heard that this will have a huge effect on the real gross domestic product.

1.3 research questions

1. Does crises and corruption have any effect on the oil drop in Nigeria?

2. Since there is drop in the price of oil, meaning that export rate is reduced, why can’t the government release the oil more to individuals?

3. is there any way the government can reduce the effect of crises and corruption on the oil production and exportation from Nigeria?

4. Is there any way the government can settle crises and reduce corruption especially in the oil sector?

5. Can the real gross domestic product of the country grow with high rate of export?

1.4 METHODOLOGY

This paper, which is part of a larger research project with a comparative research design, aims to respond to this research gap. To this end, it uses a newly elaborated comprehensive matrix of central contextual factors concerning the potential relationship between resources and violence. Taking into consideration the aboveâ€mentioned assumptions of the recent and more differentiated branches of the resource curse theory as well as the general theoretical approaches of peace and conflict research (Imbusch 2005; Senghaas 2004) and the debate re†garding the “political economy of war” (Ruf 2003), this matrix consists of the set of contex†tual factors presented in Table 1 below.

1.5 AIM AND OBJECTIVES OF STUDY

1. To determine the effect of export rate on the real gross domestic products

2. To investigate the effect of oil drop on the availability of petroleum in Nigeria.

3. To determine how to balance the export rate and the real gross domestic product of Nigeria.

1.6 SIGNIFICANCE OF STUDY

By the end of this research work, we shall be able to determine if there is a significant relationship between the real gross domestic products, exchange rate, interest rate, oil price and gross domestic capital. the research work will also determine the effect of export rate on the real gross domestic product of Nigeria.

1.7 SCOPE OF STUDY

the primary source of data for this research work was gotten from the cbn statistical bulletin 2011 and the secondary date was gotten from books, journals etc, the research work also made use of regression analysis and other econometric priori test.

1.8 DEFINITION OF TERMS

real gross domestic product: is a macroeconomic measure of the value of economic output adjusted for price changes (i.e., inflation or deflation). this adjustment transforms the money-value measure, nominal gdp, into an index for quantity of total output.

 gross capital formulation: is the total value of the gross fixed capital formation (gfcf), plus net changes in inventories, plus net acquisitions less disposals of valuables for a unit or sector.

reference

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adeniyi, o., omisakin, o., yaqub, j., & oyinlola, a. (2012). oil price-exchange rate nexus in Nigeria: further evidence from the Nigerian economy. international journal of humanities and social science , vol. 2 (no. 8).

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