‘Stakeholders worry as insecurity undermines FDIs, businesses’
The Lagos Chamber of Commerce and Industry (LCCI) has expressed worries about the negative impacts of insecurity on Foreign Direct Investments (FDIs) inflow into the country and the business community at large.
Indeed, the Chamber bemoaned Nigeria’s inability to attract FDIs as a result of the high level of insecurity, saying that despite efforts of the government on securing the country and maintaining peace, the security situation is still a narrative of challenges, apprehension, anxiety, disrupted supply chains, and increasing economic cost from the impact of insecurity.
The Guardian had exclusively reported that the economic impact of violence on countries’ Gross Domestic Product (GDP) according to the Institute of Economics and Peace (IEP) in its 2021 report on the economic value of peace, showed that as much as eight per cent of Nigeria’s GDP or $132.59 billion (N50.38 trillion at N380/$1) was being impacted economically by growing violence around the country.
Nigeria has reportedly spent at least ₦6 trillion on security without making much headway in the last decade. In 2015, Nigeria’s gross military spending was $2.07 billion, which was a 12.39 per cent decline from 2014. The defence budget saw a 16.57 per cent decline in 2016 with an estimate of $1.72 billion. This is followed by a 5.92 per cent decline in 2017 with a budget estimate of $1.62 billion. 2018 witnessed a 26.02 per cent increase with an estimate of $2.04 billion. The defence budget in 2019, however, saw a significant -8.95 per cent drop with an estimate of $1.8 billion and an estimate of $1.2 billion in 2020.
LCCI president, Mrs Toki Mabogunje, at the chamber’s 2021 security meets business dialogue series in Lagos, said in the 2021 Appropriation Act (the 2021 Federal Government Budget), defence expenditure was allocated N840.56 billion, far more than any other sector, adding that in 2020, the Ministry of Defence received N878 billion.
“In the course of the year, another supplementary budget worth about N983 billion was approved for the procurement of equipment for the military and medical infrastructure as well as COVID-19 vaccines. This vote of resources to defence operations show the commitment of the government to making Nigeria a safer and more peaceful nation,” she said.
In her words, “Insecurity does not only impact society, but it also reduces the positive benefits that security and peace bring to the macroeconomic performance of countries. Since 2000, countries that have improved in security and peace have seen an average 1.4 percentage points higher GDP per capita growth when compared to countries that have become less peaceful as measured by the Global Peace Index (GPI).
Furthermore, the average inflation and unemployment rate for the countries with the largest security improvements were substantially lower than those with the largest deterioration.”
She recommended that for the government to achieve better results in tackling insecurity, a key turning point should be to understand the causes of insecurity as well as to investigate the sources of social disorder and instability.
She stated the need for collective and integrative security architecture by the federal, state, and local governments in Nigeria, saying that this arrangement should produce a strong and coordinated presence at different levels with the responsibility of providing sensitive security information to security agencies in their areas of operation.
“This will assist in identifying criminals, their sponsors, and hideouts in the country. We urge the government to sustain the needed funding for defence operations to equip the military with advanced weaponry and intelligence infrastructure. These should be supported by heavy deployment of modern military intelligence technologies,” she said.
The Chief of Naval Staff, Vice Admiral Az Gambo, said according to the 2021 report of the Institute of Economic and Peace, stated that eight per cent of Nigeria’s Gross Domestic Product (GDP) representing over N50 trillion is being impacted economically by the growing violence across the country stating the urgent need to address the high level of insecurity in the country.
He said the Nigerian Navy remains committed to equipping the Navy to ensure a secured environment for businesses to thrive. On his part, the Chief of Defence, Training and Operations, Major General Adeyemi Yekini, represented by the Flag Officer Commanding Western Naval Command, Jason Gbassa, said the security situation is affecting the economy and people’s social welfare adversely, saying that the Nigerian government is evolving a number of strategies to address the menace.
“We have activated several operations in the six geopolitical zones in the country and very soon Nigerians will begin to see the impact of our operations,” he assured.
The Commissioner of Police, Lagos State, Hakeem Odumosu, said the Police Command has critically examined the security challenges in Lagos State and has proffered possible solutions that are crucial to sustainable security, public safety and economic growth in Lagos State.
He said the formal and informal security structures of the State are being strengthened to fight its common enemies with a view to promoting a peaceful and conducive business environment in the State.