Nigeria and the economic cost of insecurity

He retired from the newsroom as a newspaper editor. He went into Insurance. After some years, he bade bye to office work and decided to invest in the agric sector.

He went to his native state, Oyo, in Nigeria, and purchased some parcels of land for farming purposes. The farm was in the Ibarapa Local Government Area of the state to be precise.

The investment went down the drain. Not for any fault of his, nor as a result of bad weather condition, but for the destructive activities of herdsmen who grazed their cattle in the farm and plundered the crops.

He complained to the police, and wrote a petition to the Oyo State government, but nothing positive came out of the efforts. He is today sulking in silence.

This is not an isolated case as there are several others. This is the story of Adeniyi Ojebisi (real name). But he lives to tell his story. Many are not as lucky, as they went the way of their crops. It is the sad reality in today’s Nigeria.

There is a correlation between security situation of a country and such a nation’s state of economy. A nation’s economy, to a large extent, is as robust as its security.

In Nigeria as in other countries of the world, protection of lives and property is the raison d’etre of governments.

Dwight Eisenhower, a soldier and politician who served as the 34th president of the US, said: “We believe that our truly urgent need is to make our nation secure, our economy strong and our dollar sound.

“For every American, this matter of the sound dollar is crucial. Without a sound dollar, every American family would face a renewal of inflation, an ever-increasing cost of living, the withering away of savings and life insurance policies.”

Today, the Nigerian currency lies prostrate for the US dollar -- the naira exchanges N470 to $1. The importance of the economy cannot be overemphasised. But this cannot be achieved when insecurity becomes a hindrance to economic growth.

The scale of insurgencies, clashes, kidnaps, robberies across the country is alarming. Nigeria is now beset by variegated forms of insecurity. No part of the country is safe.

In his doctoral research work, titled: ‘Insecurity and Economic Growth in Nigeria: A Diagnostic Review’, Bright Enakhe Onime of the University of Port Harcourt, Nigeria, noted that “Insecurity in Nigeria has reached an alarming proportion showing its ugly head in various facets of our national life. Lives are lost on daily basis, population depleted, businesses in comatose, investments are nose-diving, multinationals closing shops and vacating the country, unemployment soaring and the populace in fears.”

The economic cost of insecurity is enormous. Many who have fled their homes can no longer work productively. Schools, power stations, and roads that have been destroyed affect the productive capacity of the economy.

Apart from erratic power supply in the country, insecurity is said to rank high in killing businesses in Nigeria at the moment.

Furthermore, displacement of people affects the production of goods for exports, thereby reducing foreign exchange earnings, import potentials and consequently further limiting output, leading to a decline in employment and earnings.

A nation replete with insecurity can neither attract investments nor grow its economy. It has been observed that in areas were insecurity is prone in Nigeria, economic activities have either been halted or lagging behind.

For instance, in the North East of Nigeria where Boko Haram holds sway, the area has been deserted, businesses including informal sector have been affected, unemployment has soared, internally displaced persons (IDPS) and camps have suddenly emerged, and states’ internally generated revenues have plummeted.

According to a report by the Amnesty International, more than 1,100 people were killed in rural areas across several states of northern Nigeria amid an alarming escalation in attacks and abductions during the first half of 2020.

“The Nigerian authorities have left rural communities at the mercy of rampaging gunmen who have killed at least 1,126 people in the north of the country since January…”, the London-based rights group said in the report.

After the kidnap and killing of Faye Mooney, a Briton and Matthew Oguche, a Nigerian, at Kajuru Castle in Kaduna State, many tourism and hospitality businesses in the North East region of the country have collapsed due to insecurity.

There are no foreign-branded hotels in the whole of North West and North East regions as international brands such as Marriott, Hilton, Radisson Group, among others shun the regions because of insecurity.

In February 2020, an American hotel group declined to manage a new 85-room hotel in Kano for fears of security of their partners’ investment, safety of staff and incessant attacks on potential guests.

As a result, businesses count losses daily as insecurity escalates. There is the burden of transporting raw materials, safety of personnel and facilities in high risk areas across the country.