Journal of Economics and Sustainable Development www.iiste.org ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.8, No.20, 2017 145 Effect of Corruption on Household Final Consumption Expenditure in Nigeria 1980 - 2015 Musa Abdullahi Sakanko 1* Mohammed Yelwa 2 1.Department of Economics, Ibrahim Badamasi Babangida university, P. M. B. 11, Lapai, Niger State Nigeria 2.Department of Economics, University of Abuja, P. M. B 117 Mini Campus Gwagwalada, Abuja Nigeria Abstract It is common knowledge that corruption is a threat to economic growth and development as it reduces the level of household final consumption expenditure. This study adopts OLS technique to examine the effects of corruption on household final consumption expenditure in Nigeria from 1980 to 2015. The result revealed that corruption has positive relationship with household final consumption expenditure in Nigeria and therefore statistically significant. The author recommends that Anti-corruption agencies and their personnel should be empowered to discipline the culprits irrespective of their status. Finally, whistle blowing policy should be reinforced and sustained by both the incumbent and subsequent governments to minimize the menace of corruption in Nigeria. Keywords: Corruption, household final consumption expenditure, Nigeria, OLS Introduction In a society where the basic needs of the citizen are inadequately provided by the governments, corrupt politicians often spend more public resources on those items that attracted people attention in other to siphon or divert the resource for their personal use which it is easier to levy large bribes and maintain them secret. Corruption no doubt reduces public spending on household consumption expenditure, education, health etc. Nigeria has enough money to tackle its poverty challenges. If the government can win its battle against corruption and mismanagement, the money will start to turn into improving welfare of the citizens, functioning schools, health services and water supply, thus laying the foundation to eradicate poverty. The effects of corruption are felt by all, but the poorest people are unable to mitigate these impacts. The poorest people often have no voice to gain redress for injury or wrongdoing and as such continues to undermine their ability to lift themselves out of poverty. Additionally, a survey by Transparency International shows, that lower income groups show a higher evidence of bribe paying. Illegal possession of what does not officially belongs to one in either public or private domain or giving of a bribe to an official so that the truth will not be told is called corruption. It involves the embezzlement of public fund for personal use and any act which is criminal act according to the law of a society. Household consumption is a key determinant of economic growth and development, putting into cognizance the market prices of all goods and services purchased by households to satisfy their needs and wants. It includes all durable and nondurable goods such as cars, household washing machines, television etc. Household consumption expenditure is not an exhaustive measure of the goods and services consumed by households. Government and non-profit institutions serving households (NPISH) often provide goods and services to households for their individual consumption free of charge or at subsidized prices. Examples are health services provided by governments or reimbursed by a social security fund, education services, the part of service provided by public museums, concert halls, operas, swimming pools that are not financed by entrance fees, aid for social housing etc. The content mentioned is rear in Nigeria as a Nation of over 177 million people because of the epidemic incidents of corruptions, thereby undermining household consumption expenditure. Huge amount is budgeted annually for health, education and services which are of paramount to household consumption, yet, this yielded insignificant impact on the target beneficiaries because of misappropriation of the public resources. This has been questionable by many with less ability to reach the authority because the cabals that formed most of our government hijack the fund by not allowing it to go down the right channel. This is the problem we face in almost all sector of government today and it had destroyed the image of the state both international and within. Any form of assistance or favor that comes through corner I.e. Not through right channel is refers to corruption. In our house, there is element of corruption, favoring one of your child or wife over others is corruption because you end up encouraging or making the life of one better than other, which maybe in reality he or she doesn't worth it. Corruption can define as denying the rightful majority their economic benefit either by diverting for personal use or for selfish interest. Corruption in humanitarian work is among the worst kind. It can mean the difference between life and death. It robs people of essential resources, destroying dignity and causing desperation. Food, water and medical supplies can be stolen and sold on the black market. Companies can bribe procurement officials to win contracts. This can mean displaced families receive sub-standard housing or poor- quality food.