Management Fraud and Global Competitiveness of Sub-Saharan Economies - Evidence from the Nigerian Banking Industry

Abstract

The purpose of this study is to investigate the effect of management fraud on the global competitiveness of sub-Saharan economies with evidence from the Nigerian banking industry. Five fraud cases involving CEOs of Nigerian banks were studied to determine the effect of such deviant behaviour on the global competitiveness of the Nigerian economy via its effect on flow of foreign direct investment (FDI). A case study approach involving documentary analysis of archival materials from Central bank of Nigeria (CBN), Economic and Financial Crimes Commission (EFCC), newspaper reports as largely captured in Otusanya (2010), conference papers, and updates involving pending court cases was adopted for the purpose of this study. we found falsification of financial statements, contribution to the collapse of the Nigerian capital market and capital flight as items common to CEOs fraud in the Nigerian banking industry. All three factors impacted negatively on the flow of FDI into the Nigerian economy. The implication is that the global competitiveness of the Nigerian economy was thoroughly compromised. We recommend immediate introduction of whistle blowing legislation in Nigeria to encourage, reward and protect whistle blowers in the country. We also recommend a spirited and transparent fight against the cankerworm of corruption, graft and get rich quick attitude that has eaten deep into the socio-economic fabrics of the Nation. The political leadership of the country must of necessity be at the vanguard of this onslaught.

Keywords: Management Fraud, Global Competitiveness, Sub-Saharan economies, Nigerian banking industry

JEL Classification: F2, F22, M4, M40