Nigeria’s economy is comatose, endless insecurity can kill it off

Nigeria’s economy is comatose, endless insecurity can kill it off

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The combination of economic fragility and national insecurity is deadly for any nation. When a country’s economy is weak, unattractive for private investment and prone to shocks with little resilience, the last thing it needs is to be gripped by violence. Insecurity would, to say the least, cripple that country’s economy.

Sadly, that’s Nigeria’s situation today. By common consent, Nigeria’s economy is extremely weak and volatile, entirely susceptible to the vagaries of world oil prices and the predilections of foreign investors. Yet, its policy and regulatory environments are acutely unattractive for private investment and business growth. To make matters worse, Nigeria faces multiple, almost perpetual, threats from organised non-state violence.

In a report on state fragility, the London-based International Growth Centre, jointly run by Oxford University and the London School of Economics, noted that “Lack of security lies at the heart of fragility”, adding that: “Fragile states are ill-equipped to respond effectively to security threats. Citizens are therefore exposed to personal risks from violence”. That, precisely, is the current situation in Nigeria, with the spread and impunity of Boko Haram, the marauding herdsmen and the rampaging activities of bandits, kidnappers, cultists, suicide bombers and other violent groups.

Of course, this has been going on for several years, but things were supposed to be different under the administration President Muhammadu Buhari, who came to power on a firm promise to tackle the insecurity in the country and make Nigeria safer. During the 2015 presidential election, Buhari, a former military dictator, lambasted the then president, Goodluck Jonathan, for failing to show leadership in fighting insecurity, and vowed that, if elected, he would “spare no effort” to defeat terrorism and insurgency in Nigeria. After winning the election, Buhari devoted much of his first press conference to the issue. The New York Times reported that Buhari “did not smile” when he talked about insecurity, brandishing his military experience as he repeated his vow to defeat terrorism.

Four years later,President Buhari’s administration hasn’t made Nigeria safer. If anything, human life in Nigeria is, to use Thomas Hobbes’s famous phrase, nasty, brutish and short. Last year, Nigeria was ranked the 5th most dangerous (i.e. least safe) country in the world, according to the Legatum Prosperity Index for Safety and Security. Although, Boko Haram is not as powerful as it used to be; yet, despite repeated claims that the terrorist group has been “technically defeated”, it remains very potent and dangerous. Indeed, in February last year, just two weeks after the government announced that Boko Haram was on its death throes, the group struck, abducting 105 schoolgirls in Dapchi, Yobo State, just as they did in 2014 when they kidnapped the 276 Chibok girls!

But, as if the Boko Haram insurgency isn’t bad enough, there is also the phenomenon of killer-herdsmen, who regularly raid villages and kill innocent farmers across the country, but particularly in the North Central. In 2016 alone, the herdsmen’s criminal rampage led to the deaths of 2,500 people, according to the International Crisis Group. Since then, several thousands more have also been killed, with the attendant humanitarian calamity of more than 200,000 internally displaced people.

Over the past few weeks, stories of rampant insecurity and loss of lives and properties have dominated Nigerian newspapers.  Last Thursday, the Vanguard newspaper screamed on its front page: “Worsening insecurity – 34 killed in four states”! The paper reported that cult war claimed 11 lives in Edo State; Boko Haram attacked military base and a community in Borno, killing 11 people; herdsmen killed 11 people in Taraba State; and gunmen stormed a community in Sokoto State and killed the traditional ruler. The incessant attacks have forced many residents to flee Sokoto State to the Republic of Niger.

In his book Leviathan, Hobbes described the state of human nature as unbearably brutal, a state in which everyone is always in fear of losing his life to another; where even the strongest man could be killed in his sleep. Nothing brought that home more than the report that over 200 heavily armed bandits attacked a village in President Buhari’s home State, Kastina, killing several people and destroying properties. In fact, even more Hobbesian was another report that gunmen stormed Buhari’s hometown, Daura, and kidnapped a senior traditional title holder. In the state of nature, according to Hobbes, even the strongest man could be killed in his sleep, and, yes, even a president’s hometown is not safe! It would seem that the utterly brutal state of nature that Hobbes describes now exists in Nigeria.

But what are the consequences of all this? Well, apart from the enormous human costs, the widespread insecurity is also causing huge devastation to Nigeria’s economy. As the BBC puts it, “Nigeria’s insecurity has added to its economic woes, hindering foreign investment”. But before we come to the impact on foreign investment, let’s consider the socio-economic consequences of the disruptions that the insecurity is causing to internal trade and farming. Surely, when farming is disrupted, food security is affected; and, especially for a country that is also banning food imports, poverty and hunger would increase.

In a recent editorial, entitled “The looming hunger, poverty time bomb”, the Vanguard newspaper (April, 25, 2019) noted that “The widespread hunger verging on famine has been exacerbated by an escalation of insecurity across the land”, pointing out that “the entire food belts of Nigeria have been under siegeby violent armed groups”, resulting in the displacements of “many farming communities”. Alarmingly, the newspaper warned that “Insecurity is fuelling poverty and hunger in a way never seen before, not even during the Nigerian Civil war”! Things are that bad!

But the impact on farming and food security apart, the dire security situation is also harming Nigeria’s ability to attract long-term foreign investments, which are major sources of economic growth and job creation. Even without the security challenge, Nigeria’s is an unattractive investment destination due to its adverse policy and regulatory environments, especially the distortionary exchange rate regime. But insecurity has made the situation worse. Several studies show a strong relationship between Nigeria’s Terrorism Index and FDI inflows, with FDIs falling as terrorism rises! Indeed, the Nigeria Investment Promotion Commission (NIPC) attributed the decline in FDIs by 21.26% in 2017 to, in large part, insecurity. In one of its World Investment Reports, the United Nations Conference on Trade and Development (UNCTAD) noted that foreign investors were even avoiding the oil sector, which had always been the biggest pull for FDI in Nigeria, partly due to security challenges.

Of course, this shouldn’t be surprising,given that very few foreign companies would want to jeopardise the lives of their employees or the safety of their assets by investing in a violent country, which is how many see Nigeria. In its 2019 World Factbook, the US Central Intelligence Agency (CIA) said that “Nearly half of all reports of vessels being fired upon occur in Nigerian waters”. There is also the regular kidnapping of foreign workers. China is actively engaged in the Nigerian economy, but more Chinese workers have been kidnapped, even killed, in Nigeria than in any other African country. Given China’s priority to protect its investment and people abroad, it is unlikely to tolerate that situation for too long!

To be sure, Nigeria faces a quandary. Unless it grows its economy and tackles poverty, it can’t stop the widespread insecurity, which is caused by joblessness and other social ills. Yet, without tackling the insecurity, it can’t attract the investments to grow its economy. The solution lies in a comprehensive, holistic and joined-up response. But the buck stops with President Buhari!


Olu Fasan

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