Nigerian economy gasps for breath as bandits, thieves, saboteurs lay siege
Bandits and banditry found their way into Nigeria’s mainstream media in an attempt to placate barefaced acts of terrorism. With such complicit negligence to reign of terror and attendant existential threats, terrorists have gained swathes of territories. Nigerians and virtually every sector of the economy are currently under siege – a situation compounded by the global crisis and rising inflation. With at least 10 per cent of the country’s GDP now cornered by insecurity, the Nigerian economy is on life support and needs a miracle to survive. FEMI ADEKOYA writes.
At first, it seemed like ‘their’ problem. However, the last few years have shown that ‘their’ problem has become everybody’s. With a nation constantly facing onslaughts from terrorists and a Commander-in-Chief with knack for expressing condolences and ‘shock’, the Nigerian economy is taking a serious beating on all sides with dire consequences for the future.
Apart from the destruction of life and property, the economy continues to suffer as rising insecurity dents the appetite to invest in the country.
The dynamism of Nigeria’s insecurity has gone beyond containment to certain areas. The pattern of the terrorists’ onslaught bears the signature of high-level connivance with those who are supposed to protect the people.
Thousands of Nigerians are abducted each year by heavily armed bandits, and dozens of children in the North East are kidnapped from schools for ransom. According to SBM intelligence, in the first six months of 2021, 2,371 (FY 2020: 2,860) Nigerians were reportedly kidnapped while 10,366 (2020: 7,063) Nigerians were killed in 2021.
This year alone, at least 7,222 Nigerians have been killed and 3,823 abducted as the country witnessed 2, 840 incidents of insecurity between January 1 and July 29, 2022.
Also, no fewer than 1,499 people were injured during the various attacks witnessed in 505 local government areas in the country. These were contained in data obtained from the Nigeria Security Incidents Tracker by Beacon Consulting.
A breakdown, according to geopolitical zones, revealed that the North East recorded 777 incidents in which 2,052 individuals were killed and 344 kidnapped. In the North West, 519 incidents occurred in the region, leading to the death of 2,229 individuals while 1,989 were abducted.
No fewer than 494 incidents were witnessed in North Central out of which 1,748 residents lost their lives and 950 were kidnapped. South West recorded 420 incidents, which led to the death of 386 individuals, and 195 were abducted. 310 incidents occurred in the South East region. 420 people were killed, while 157 were kidnapped. In South South, 278 incidents have so far been recorded. 386 individuals were killed and 195 kidnapped.
Over a period of five years (2016 – 2021), it is estimated that over ₦5 billion was paid as ransom to kidnappers, indicating that the country’s kidnapping industry is witnessing a boom. With the kidnapping that followed the Abuja-Kaduna train attack, the amount paid in ransom appears to be spiraling out of control. Indeed, kidnapping remains significantly underreported and true numbers of incidents will be higher.
According to the 2022 Global Terrorism Index, Nigeria ranks third in the list of countries most impacted by terrorism in sub-Saharan Africa and is the sixth most impacted country in the world.
Available data on 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 (N55.68 trillion at N420/$1) is being impacted economically by growing violence around the country. IEP’s 2022 estimates showed that the impact has risen to nine per cent of the country’s GDP.
For terrorists to invade the Nigerian Defence Academy (NDA), Kaduna, kill soldiers and abduct some; shoot down military planes; attack national assets like the Abuja-Kaduna train, boldly attack Kuje Correctional Centre, freeing dangerous criminal inmates; ambush advance security team of Mr. President, and lately killing members of the elite Presidential Brigade Guards, among several other audacious attacks are indications that Nigeria is in trouble.
President Muhammadu Buhari has held more security meetings in the last seven years than any other head of state or president in Nigeria’s recent history; yet, there is no concrete result. But the most surprising and annoying for most Nigerians is that he suffers fools gladly.
Causes of insecurity in Nigeria
TERRORISM, rising poverty, inequality, and unemployment, particularly among the youth, are at the centre of Nigeria’s insecurity problem. Thus, increased insecurity in Nigeria has coincided with rising poverty levels, with an estimated 83 million people, which is 39 per cent of the total population, living in extreme poverty (less than $2 per day) as of April 2022. This is a significant 18 per cent increase from 70 million people recorded in 2016.
According to Agusto & Co, religious and ethnic intolerance remains a major driver of insecurity, which has led to many attacks, and clashes that have intensified over the years leaving many citizens in perpetual fear daily.
There have been increased terrorist attacks, including attempted attacks on the Kaduna airport, an attack on a Kaduna-bound train on the Kaduna-Abuja rail line, and destruction of assets of the election umpire across the country, as well as other criminal activities.
Similarly, since Nigerian youths, under the #EndSARS movement, took to the streets about two years ago to protest against widespread police brutality against the citizens, and demanded proscription of the Special Anti-Robbery Squad (SARS) for violating the fundamental human rights of Nigerians, the country has been facing escalating insecurity.
The aftermath of the #EndSARS movement equally led to the breakdown in law and order, even as the government became more scared in implementing unpopular economic reforms for fear of public reaction. Among the security agencies, morale dropped to an all-time low.
In the South East, Mondays are known for attacks on citizens that violate the sit-at-home directive of the Indigenous People of Biafra (IPOB) secessionist group –the country’s porous borders exacerbate these attacks, as a large influx of arms and weapons are smuggled from neighbouring countries.
Unfortunately, the poor security infrastructure and equipment have rendered the various strategies deployed to tackle the challenge ineffective.
The seeming inability of security operatives to contain the problem has emboldened even more insurgents, bandits and kidnappers. In addition, a system that has been proven to reward repentant terrorists disproportionately creates a perverse incentive for many young people currently faced with poverty and destitution.Insecurity and the economy
ACROSS different segments of the economy and individual households, the cost of insecurity is taking a toll on incomes, notwithstanding pressure from the rising core and food inflation. Since the Kaduna-Abuja train attack and subsequent kidnapping of some Nigerians on the train, the demand for air tickets has soared, further impacting the cost of moving from one point to the other.
Air travel in the country has witnessed significant patronage in recent years due to rising insecurity that has seen many roads taken over by kidnappers. The high risks hovering around road transportation have pushed more people to take to the skies, resulting in poor services as some airlines struggle to meet demand.
Indeed, what used to be a trend in the oil and gas sector is fast becoming a threat to the growing agriculture sector as well as the logistics, transportation and services sectors.
With the minimum wage at N30, 000, an average household pays a minimum of N1000 monthly on neighbourhood security services, representing at least three per cent of the monthly income, while many firms have had to retain police escort services for the purpose of movement of goods and staff.
Specifically, the kidnapping of innocent students and other vulnerable citizens for ransom has become a lucrative business, following the lacklustre approach of the government to deal with culprits.
While the threat resulting from Boko Haram and other ‘bandits’ appears to be geographically contained around northern and central states, the country’s commercial capital and other regions that appear to have been spared, are undermined by the impact of threats in the area of access to food, communal crisis and rising cases of kidnapping.
The disruption to lives and livelihoods and the surge in the number of internally displaced people has triggered a humanitarian crisis. Many displaced people are being prevented from accessing vital services such as healthcare, and farmers are unable to plant or harvest crops.
In some cases, armed bandits insist on payments before farmers can have access to farmlands in the planting season, only to return during the harvest season and extort farmers for further payments before any access is granted. This has led to scarcity and a surge in the prices of certain food commodities.
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.
With an allocation of N31.97 billion, the Nigerian Air Force took the largest share of the Ministry of Defence’s total Capital Expenditure Ceiling of N120.04 billion for 2021. The Nigerian Army followed with N27.87 billion, while the Navy got N12.04 billion. For 2022, over N1 trillion was allocated for defense operations, procurement and upgrade of capabilities, and infrastructure.
While the impact might seem exaggerated to the average Nigerian, the disruptions to the agriculture sector, currently accounting for 23.24 per cent of the GDP according to the latest NBS data, trade and manufacturing, provide a clearer picture of the ripple effects insecurity is having on the economy and its recovery.
Indeed, the latest GDP numbers confirmed the fears about rising insecurity in the oil and gas sector. With rising crude oil theft, the oil sector contributed 6.33 per cent to the total real GDP in Q2 2022, down from the figures recorded in the corresponding period of 2021 and the preceding quarter, where it contributed 7.42 per cent and 6.63 per cent respectively.
Nigeria recorded an average daily oil production of 1.43 million barrels per day (mbpd), lower than the daily average production of 1.61mbpd recorded in the same quarter of 2021 by 0.18 mbpd and lower than the first quarter 2022 production volume of 1.49 mbpd by 0.06mbpd.
Unchecked crude theft continues to take a toll on government’s earnings, undermining the ability of the government to meet its obligations and the apex bank in providing foreign exchange for legitimate businesses.
Speaking during a conference in Lagos, stakeholders noted that the fiscal environment, especially in the upstream sector remains undermined by insecurity and crude theft.
The Group Chief Executive Officer of Nigerian National Petroleum Company Limited (NNPCL) Mele Kyari, confirmed that the country’s production is very low, mostly, because of the security challenges in the Niger-Delta, adding that if the country resolves the security issues, production will get back to 2.1 million barrels per day.
Nigeria’s oil production slumped by 28 million barrels between January and July 2022, threatening the Federal Government’s N9.37tn oil and gas revenue target by the end of the year.
The Federal Government, in the 2023-2035 Medium Term Expenditure Framework & Fiscal Strategy Paper recently presented by the Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, blamed oil production shut-ins owing to pipeline vandalism, crude oil theft and high petrol subsidy cost.
Also, the Chief Executive Officer of Nigerian Upstream Petroleum Resources Commission (NUPRC), Gbenga Komolafe, acknowledged that the challenges of seamless production in the form of rampant crude theft and sabotage of critical infrastructure are still her.
He added that efforts are underway to promote the implementation of Nodal surveillance technologies on the main trunk lines at each manifold for real-time loss detection that will enable swift and more proactive responses as well as enforce installation of tamper detection technologies as part of designs for pipeline and related oil and gas production facilities for approval of the Commission.
Without a sincere will to combat national insecurity, no amount of defence strengthening can result in safety. As the recent oil heist by the MV Heroic Idun amply demonstrates, insecurity in Nigeria is not just about combating terrorism but also about preventing government support for terrorism or economic sabotage.
Insecurity and impact on food production, inflation
IN the North, where the bulk of commercial farming takes place given their vast arable land, some farmers in Zamfara, Katsina, Nasarawa and Benue states have lamented that the insecurity has prevented them from taking maximum advantage of the rainy season, which would have boosted their harvest and crash the price in the market.
Some of them said they had to pay levies to the terrorists to be able to access their farms.
The Minister of Agriculture and Rural Development, Mahmood Abubakar, noted during a recent ministerial briefing organised by the Presidential Communications Team that attacks by terrorists had denied farmers access to their farms, especially in the North-West and North-Central. He, however, said government was making efforts to address the problem.
He had said, “that is one of the reasons why we have an arrangement for security agents known as agro-rangers, who are providing some measures of security so that the farmers will be able to access their farms. Truly, if they cannot completely access farms all over the country, you will expect a drop in production, but right now we are doing everything possible to make sure production is maintained through that security provision.”
In May, Boko Haram members of the Islamic State West African Province faction reportedly invaded some farmland on the outskirts of Kala Balge Council of Borno State and killed over 50 farmers. There have been other attacks on farmers in different parts of the North. In the South, some farmers also complained about the invasion of their farms by herders.
The Food and Agriculture Organisation of the United Nations expressing concern over the looming food crisis in Nigeria said it might lead to instability.
In a joint FAO-World Food Programme report, it stated that Nigeria and other countries were named as one of the 20 ‘hunger hotspots’ where it feared that hunger might worsen.
Insecurity and brain drain
WHILE there have been arguments about the reasons and number of people relocating from the country in search of greener pastures, the fact remains that insecurity and government’s unfriendly economic policies remain a major factor Nigeria is losing a high number of its skilled talents to other developed economies.
The complaints about Nigeria’s unfriendly ecosystem and inability to provide jobs for its teeming youths became escalated post # EndSARS. With many youths realising that justice may never be served and their interests unprotected, they decided to leverage the capacity that cannot be taken away by the government, their brains.
Across different sectors, there have been complaints about massive brain drain. Presently, Human Resources are worried about the attrition rate across different departments and sectors owing to relocation plans by many Nigerians.
The security of lives and properties should top the priority list of the government. The inability to secure lives and properties or perception of fear, leads to a rise in migration globally.
Though the Minister of Health, Dr. Osagie Ehanire, insisted that Nigeria does not have a shortage of doctors and other health workers, the reality in the health institutions is different. Across different segments of the economy, the urge to migrate has never been as intense as it is presently.
Findings by The Guardian showed that software, hardware engineers, system integrators, digital marketers, accountants and auditors are dumping high-paying employments in banking, financial technology, education, insurance, manufacturing and teaching as economic opportunities shrink amid rising insecurity.
Beyond the desire to immigrate to other countries, findings showed opportunities in remote work, especially with many undertaking dollar-denominated projects and work, is equally creating concerns for talent retention by local firms that are unable to match the foreign exchange earnings of many talents. This phenomenon became pronounced with the COVID-19 pandemic and the lockdown that ensued.
The trend poses an enormous challenge to local companies, who are now struggling to replace fleeing talents. Companies now conduct interviews to replace lost good hands monthly, sources disclose to The Guardian. Unlike in the past when unemployed and individuals in low-paying jobs were those eager to leave, multinational companies operating in the country are also trapped in the quagmire.
The reason for leaving the country is apparent. Currently, Nigeria is battling rising unemployment estimated at 33.3 per cent. Rising insecurity, manifesting as banditry and hostage taking, has risen to a new height while inflation is taking a serious toll on the real incomes of households.
With the situation not abating, findings showed that Nigerians, especially within 25 and 45 age bracket, whose services are critical to the information and technology operations of some leading organisations, especially in banks, manufacturing companies, Fintechs and insurance organisations, are exploring offshore jobs abroad, forcing them to leave the country in droves.
There is another category of people leaving the country through the education route, driven by lingering industrial action by university lecturers majority of whom head to the United Kingdom and Canada.
Findings suggest that most of those who leave the country via the study route, especially those seeking second degrees, only use the pursuit of knowledge as a leeway, as they do not intend to return on completion of their programmes.
As a confirmation of this migration, the United Kingdom immigration statistics as at June 2022, revealed that there were 486,868 Sponsored study visas granted (to both main applicants and their dependants), 71 per cent (202,147) more than 2019.
Of the study visas issued by the UK, Nigerian nationals saw the largest relative increase in Sponsored Study grants compared with 2019, increasing by 57,545 (+686 per cent) to a record high of 65,929, making them the third largest nationality group in the latest year.
Similarly, out of 722,962 non-immigrant visas issued by the United States in June, Nigerians got 6,915 with B1/B2 category recording the highest at 5,061. Other categories of visas issued include G2, J1, C1/D, A1, K2, H3 and P4.
This migration figure could be compounded if statistics from the US Citizenship and Immigration Services (USCIS) is to be considered.
USCIS revealed that 40,000 immigrant visas are set-aside yearly for skilled workers, who seek to immigrate based on their job skills.
Selected applicants are allowed to relocate to the US with their spouses and children.
The US said 65,000 immigrant visa allotments remained unused at the end of 2021, and as such, it has taken steps to avoid a repeat.
The five categories eligible for the visa include persons of extraordinary ability in the sciences, arts, education, business, or athletics and “members of the professions holding advanced degrees.”
OPS worry about rising insecurity and productive sector
FARMERS’ inability to go to farms is a critical concern for the industrial sector already struggling to access foreign exchange for critical raw materials. Indeed, Nigeria’s backward integration plan remains undermined by rising insecurity.
As a result of the situation, a number of companies in the zone operated at sub-optimal level, while others have either shut down operations or relocated to a safer environment, said the report.
According to MAN, the companies experienced severe stockout of primary raw materials, particularly agro-allied as most of the farmers had taken to their heels due to insurgency.
The index score of Bauchi/Benue/Plateau fell below the 50 points baseline at 46.3 points from 48.3 points recorded in the first quarter of the year. Likewise, Index score of the Abuja zone also declined to 43.5 points from the 44.8 points in the first half of the year. Rivers/Bayelsa scored 45.0 points, which fell short of the 46.0 points recorded in the first quarter.
The Association advised that the government should be proactive in dealing with internal and external security issues by exploring policies that would help to create a buffer for the economy.
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) also argued that the security situation in the country demands urgent and serious attention.
The Nigerian Economic Summit Group (NESG) also urged the Federal Government to devise a pragmatic national security strategy that unconditionally guarantees the safety of life and property within the country.
“Despite huge budgetary allocation to defence and national security, the current state of insecurity across the country has risen to an alarming level. Despite some changes to the leadership of the national security apparatus, conditions have not improved. There is hardly any need to itemise the adverse impact of insecurity on food prices, productivity, ease/cost of doing business, investor confidence and national pride”, the NESG added.
Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, noted that the state of insecurity has reached a frightening level deserving of a state of emergency declaration, adding that the trajectory portends serious adverse implications for economic growth prospects and investment outcomes.
“We cannot retain, scale or attract investment in an environment that is not secure. This is true of domestic and foreign investments. The situation continues to pose a very serious challenge to lives and livelihoods. Investors’ confidence has been greatly undermined with investments across all sectors being adversely affected. When investment is in jeopardy, livelihoods are negatively impacted. Worsening insecurity is adversely impacting lives and undermining livelihoods. This is taking a huge toll on both the social and economic life of the nation,” he added.
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