Unemployment in the Nigerian Economy: The Role of Corruption Benjamin Wanger 1* , Benedict N. Akanegbu 2 , Kenneth O. Diyoke 2 , Konstantinos Vergos 3 , Ahmed Adamu 2 & Moses K. Asongo 4 Nigeria Police Academy, Wudil-Kano 1 Department of Economics, Nile University of Nigeria 2 Economics and Finance, University of Portsmouth, UK 3 Department of Accounting and Finance, Benue State University, Makurdi. 4 Corresponding: +234 803 504 4574, wangerextra@gmail.com Article Information Article history: Received 15 th of June 2024, Accepted 12 th of July 2024. Abstract Given the contemporaneous fluctuations in Nigeria’s GDP and Unemployment, it is worrisome as to whether the figures being reported are genuine. To this end, this research idea was undertaken to unravel the mystery behind these figures. Specifically, the paper investigated the level of unemployment in the Nigerian economy, focusing on the role of corruption. Time series on UNR, GDP, INF, ALP, GOE, LFI, SLF, and COR were obtained from 1980-2020. The Fully Modified Ordinary Least Squares (FMOLS) and the Canonical Cointegrating Regression techniques were employed as robustness tests for the Granger Causality test conducted. It was found that the natural rate of Unemployment in Nigeria is negative (-24%). Secondly, GDP, GOE, and COR are related to UNR. It was concluded that Corruption is responsible for the high level of unemployment in Nigeria. To develop the Human capital, sustenance of the subsidy removal and an intensified oversight of the budget process were recommended to reduce corruption, and unemployment, and sustain economic growth and development. Keywords: Unemployment, Corruption, Okun's Law, Beverage Curve, FMOLS, CCR 1 Introduction Economic growth is an increase in the production of goods and services in an economy over a definite period (Agarwal, 2022). Determinants of economic growth include increases in capital goods, increases in labour force, advances in technology, and development of human capital - implying increased application of inputs e.g. labour Which all depend on the Fiscal policy design/implementation – government expenditure. Economic growth is measured by increases in the aggregate market value of additional goods and services produced, using estimates such as GDP, which could be nominal or real. Nominal economic growth rate = (GDP2−GDP1)/GDP1, ……………………………………………….1 Real economic growth = GDP/1+ inflation in base year. Where GDP2 is the value of GDP for the current year whereas GDP1 is that for the previous year Unemployment occurs when a person who is actively searching for employment is unable to find work. It measures the health of the economy, and it is measured by the unemployment rate, which is also equal to the percentage of the labour force that is unemployed i.e. unemployed/Labor force. The rate of (un)employment in an economy affects aggregate demand through employment incomes, productivity, and growth (Tanzi, 1998). The author warned that corruption may continue to be a problem if appropriate reforms are not made. The short-run relationship between unemployment and growth may be a loose one (Levine, 2013). Unemployment is a lagging indicator. Nigeria’s unemployment stood at 21,764,614 Nigerians in 2018. This figure includes those that have experienced job loss and those that have recently joined the labour force (recent graduates and former housewives/stay home husbands). The increase from the third quarter of 2018 grew by 4% from 23.1. The underemployment rate also witnessed a jump to 28.6%. This implies that 28% of the labour force works under 20 hours a week and is, advertently, underpaid. Added together, both the unemployment and underemployment rates are capped at an astounding 55.7%. In the fourth quarter of 2020, the unemployment Accounting, Budgeting and Financial Management 2024 Vol. 1, No. 1, pp. 1-15 ISSN Print: 1119-197X www.primaljournals.org 1