It's actually a "bonding" wire. Connects all the metal in the equipment and pool (including ladders, lights, structure, etc.). Meant to keep everything at the same level, to prevent stray current from giving one shocks. I'd get some sandpaper and/or a wire brush, and make both the lug itself (inside and out), and the area of the wire so they are bare metal - to make better electrical contact. The corrosion may act like an insulator and reduce or even defeat the purpose. One can usually find lugs at a better hardware store. But it may be an issue finding the other end of the wire to feed back in to the new one. At minimum, clean the tab your new screw goes through.