CORPORATE STEALING AND ITS DEVASTATING EFFECTS ON THE AFRICA ECONOMY

CHAPTER ONE

INTRODUCTION

          Since crime has always existed in human society, in both prosperous and impoverished times, it is a problem that has existed for as long as mankind has existed. According to sociologist Emile Durkheim, crime is an unavoidable aspect of human society because of the differences that exist among people. However, sociologists have divided crimes into many categories, with corporate crime being one of them. Corporate crime, which is categorised as a subset of white-collar or organisational crime, is increasingly posing a severe danger to national economies all over the world. Corporate stealing, according to Schmalleger (2002:362), is the act of a corporate entity or its officers, staff, or agents violating a law for the profit of a corporation, partnership, or other type of commercial entity. He went on to say that the crime can also be understood as an instance in which powerful institutions or their agents wilfully disobey the laws that were created to stop them from doing social harm or that demand that they act responsibly as a business.

          There have been cases where it has been or is being committed within the market with catastrophic effects on the national economy in Africa's more recent adopters like Nigeria. Considering the crucial role that the capital market plays in the growth of a country's economy, this paper examines the devastating effect of corporate stealing on Africa’s economy.

1.1 Background of the Study

          In Nigeria, corporate theft is quickly spreading like a disease.Consumer complaints about businesses failing to adapt how they operate are frustrated by the government's complacent response to the anomaly, which has made it seem like the standard (Micheal, Danielle & Melisa, 2018). An organisation is a legal business entity that was established to pursue specific, long-term goals with financial success as the overarching purpose. Corporate crime refers to bad behaviour by management or employees operating on behalf of their employer or corporations with the goal of generating profit for the organisation (Iyidiobi, 2015). Such criminal activity frequently involves the pricing of goods, services, or policy. Violence, financial crime, and other forms of corporate crime are all possible (Lederman, 2001). when clients or customers overpay for goods or services in comparison to the value of the services received. An organization's output must be viewed as being worth what was paid for it. Physical harm, financial loss, security market manipulation, trade secret theft, investment trends, arbitrary charges, corporate bribery, corporate homicide, corporation Act violations, corporate liability, negligent act prevention, and other things are all examples of corporate crime. When committing these kinds of business crimes, management or staff members of the organisation operate in accordance with its policies. It is often referred to as organisational crimes or white-collar crime. The actions of corporate organisations, which are motivated by profit, have an impact on the economic life of the general people.

          The goal is to turn a profit without relying on customers or listening to complaints about their subpar services or goods. Whether a company is private or public, the monetary fees associated with the services are often assessed in relation to quality, time or duration, value, and satisfaction. When discussing prices, the question of whether the services provided are quantifiable does not prohibit taking value and satisfaction into account. Consumers must be safeguarded from businesses' impulses towards capitalism in their pricing practises. Profit incentives are essentially what motivate all corporate wrongdoing. It demonstrates that the result of corporate crimes is typically excessive deterrence (Micheal, Danielle & Melisa, (2018).

          The definitions of corporate stealing are subject to disagreement (Adibe&Obiefuna, 2015; Ijaiya, 2015; Iyidiobi, 2015; Ukwueze, 2015). A description of the term indicated that corporate crimes involve holding corporations accountable for actions taken while carrying out profitable activities, and that not much has been done in some areas of corporate crime. The perpetrator and the impoverished are separated by a great distance. Sampson (2003) has explored the various types of corporate crimes and the government's inadequacy to defend its citizens against such crimes committed by business organisations.

The creation of the capital market in Africa began in March 1960, when the Nigeria Stock Exchange was formed and incorporated in accordance with section 2 of the Stock Exchange Act 1960. It changed its name to The Nigerian Stock Exchange in December 1977, and branches were constructed in some of the country's major commercial centres. The Nigerian Stock Exchange currently has six branches. A trading floor is included at every branch. Lagos' branch was established in 1961, followed by those in Kaduna, Port Harcourt, Kano, 1989, Onitsha, February 1990, and Ibadan, as well as Abuja, October 1999, and Yola, April 2002. The Exchange's main office is in Lagos. The Securities and Exchange Commission (SEC) is the top regulatory authority, and the Exchange is the focal point of the Nigerian capital market. The Exchange now has 262 securities registered for trading, up from 19 when it first opened for business in 1961 (Samson, 2018).

          The Exchange offers a trading platform for current securities and encourages big businesses to list their stock publicly. As of August 31, 1999, it consisted of 194 Equity/Ordinary Shares of Companies, 49 Industrial Loan (Debenture/Preference) Stocks, 11 Government Stocks, and a total market capitalization of about N287.0 billion (Wikipedia, 2008). The majority of the exchange's listed businesses are affiliated with international or multinational organisations and represent many sectors of the Nigerian economy, including manufacturing, agriculture, and services. The Exchange also offers a method for releasing both individual and public savings, making them available for useful uses.

          The market has a well-established network of stockbrokerage firms, issuing houses (merchant banks), corporate law firms, and more than 50 reputable audit and reporting accounting organisations, the most of which have connections abroad. The primary and secondary markets, respectively, are the two levels at which market operations are carried out (Samson, 2018). New securities are issued on the primary market, where they can be traded through the offer for subscription, right issues, offer for sales, and private placement offer mechanisms. On the other hand, existing securities are traded on the secondary market. After being issued in the primary market, securities are purchased and sold in the exchange and over-the-counter markets. The Securities and Exchange Commission (SEC), which oversees the market's overall regulation, the Nigerian Stock Exchange (NSE), a self-regulatory body that monitors the activities of publicly traded companies and other market operators, such as issuing houses, stock brokers, investors, etc., are major participants in the Nigerian capital market. The Central Bank of Nigeria (CBN), the Federated Institute of Bankers of Nigeria, and other important participants serving as regulators are also significant participants.

          In an effort to regulate the capital market, the federal government created the Securities and Exchange Commission (SEC) in 1980. This was done in accordance with the Securities and Exchange Commission Act of 1979. The agency, which serves as the top regulatory body, is tasked with creating and regulating the market in order to uphold appropriate moral standards and professionalism (Ijaiya, 2015). The registration of the stock exchange, or any of its branches, registrars, investment advisers, securities dealers, and their agencies is one of the Commission's powers. Once more, the Government formed the Investment and Securities Tribunal (IST) as a specialised judicial body in 1995, relying on the recommendations of the Odife Panel.

          The Administrative Panel Committee (APC) of the Securities and Exchange Commission (SEC) refers disputes and controversies involving capital market transactions to the tribunal, which is an independent institution with that function. According to the regulatory structure of the Nigerian Capital Market, the Nigeria Stock Exchange (NSE) provides the market environment for transactions and regulates operators through self-regulatory mechanisms, while the Securities and Exchange Commission (SEC) holds the top regulatory position (Dennis, Igbara& Johnny, 2021).On the other hand, through developing regular monetary policy recommendations, the banks and the Federal Ministry of Finance play supervisory duties. Last but not least, all issues referred to the Securities and Exchange Commission are handled by the Investments and Securities Tribunal (IST), a specialised court. It is based on this background that the present study seek to examine the devastating effect of corporate stealing on Africa’s economy.

1.2 Statement of the Problem

          A country's per capita output or income is seen to be expanding when it is quantitatively sustained and accompanied by increases in its work force, consumption, capital, and volume of commerce (Todaro& Smith, 2011). International trade, financial development, the formulation of macroeconomic policies, research and development, the accumulation of physical and human capital, and other elements, according to researchers, are some of the factors that stimulate economic growth.

          The GDP of a nation is frequently used to statistically measure economic growth since it captures all market activity and all final products and services exchanged for cash. However, some economic activities are not taken into account when calculating the GDP, such as the majority of work done by women, such as childrearing, household chores, and growing food for the family. It also does not take into account volunteer work or charitable endeavours, social harmony, or illegal activities like crime and its proceeds. These unobserved variables might have an impact on the size and operation of the Nigerian economy.

          Over the past few years, theoretical literature on corporate theft and economic growth has sparked a lively debate. Corporate crime, such as theft, has been the subject of research by academics who have proposed theories on how it might both slow economic growth and damage an organization's performance. On the one side, academics have claimed that corporate theft is bad for economic progress, including Ekundayo et al. (2013), Rotimi&Obasaju (2013), Ezema and Ogujiuba (2012). They make the point that corporate crimes alter organisational objectives and shift funds from public to private uses, leading to problems inside the organisation.Furthermore, choosing a proxy for corporate crimes is a key difficulty for empirical studies on Nigeria. The majority of the empirical studies under consideration used the subjective corruption perception index as a stand-in for corporate theft and concluded that corporate theft drives economic growth rather than the other way around. Undoubtedly, a variable with more time points and a largely objective nature is better to one with subjective characteristics. As a result, the goal of this study is to provide a solid econometric analysis that increases our understanding of the connection between corporate theft and economic growth in African countries over the short and long terms while maintaining an unbroken democratic system. It is believed that this will shed brighter light on the impact of corporate stealing on African economy.

1.3 Objectives of the Study

          The main objectives of this study is to examine the  devastatingeffect of corporate stealing on Africa’s economy specifically in Nigeria. Other specific  objectives of the study include;

1. Determine the impact of interest rate economic growth in Nigeria.

2. Evaluate the impact of corporate stealing on economic growth in Nigeria.

3. Examine the impact of money supply on  economic growth in Nigeria.

4. Determine the impact of liquidity rate on on economic growth in Nigeria.

1.4 Research Questions

          The following qestions guided this study;

1. What is the impact of interest rate economic growth in Nigeria?

2. What is the impact of corporate stealing on economic growth in Nigeria?

3. What is the impact of money supply on  economic growth in Nigeria?

4. What is the impact of liquidity rate on on economic growth in Nigeria?

1.5 Research Hypotheses

          The  following were hypotheszed;

Hypothesis 1

H0: Interest rate have no significant impact on economic growth in Nigeria.

H1: Interest rate have a significant impact on economic growth in Nigeria.

Hypothesis 2

H0: Exchange rate have no significant impact on economic growth in Nigeria.

H1: Exchange rate have a significant impact on economic growth in Nigeria.

Hypothesis 3

H0: Money supply have no significant impact on economic growth in Nigeria.

H1: Money supply have a significant impact on economic growth in Nigeria.

Hypothesis 4

H0: Liquidity rate have no significant impact on economic growth in Nigeria.

H1: Liquidity rate have a significant impact on economic growth in Nigeria.

1.6 Significance of the Study

          For the different arms of government, this study will form one of the major yardsticks for evaluating the performance of African countries within the uninterrupted democratic dispensation period and also form the basis of policy formulation to improve democratic governance.

          This study will serve as a reference material for econometric modeling of economic crimes in Nigeria and a tool in hand for further research.

          The study would become a useful tool to calibrate policies for combating corporate stealing and developing the political will towards implementing these policies. Indeed, when implementing a cost-benefit analysis, it may be convenient to increase the contrast level of corpporate stealing when the economic cost of stealing is greater.

1.7 Scope of the Study

          Thisstudyis limited to the devastating effect of corporate stealing on African economy. Therefore, the researcher limited its work to how corporate crimes like stealing can affect the economic growth of an organization. This implies that Nigerian economy for the purpose of this research is construed as economic growth. Data for the study and analysis of data relate to Nigeria only. Moreover, because of the possibility of non-linear relationship between corporate stealing and economic growth, state space method that measures non-linear relationships when time series data possess break dates and are subject to regime changes while accounting for time-varying coefficientof economic crime was employed.