How insecurity is affecting Nigerian Economy –LCCI
Insecurity has been identified as one of the major impediments militating against the Nigerian economic growth.
Some of the identified areas of economic activities seriously affected by insecurity in Nigeria include: investment; food production, and transportation amongst others.
These facts are contained in a report released recently by the Lagos Chamber of Commerce and Industry (LCCI) titled “Insecurity in Nigeria: Implication for the Economy.”
The report stated that insecurity has led to many deaths, displacements as well as impacted negatively on business activities and food production.
According to the report, “In the recent past, Nigerian has witnessed unprecedented security challenges occasioned by the activities of extremist, kidnappers, armed robbery in almost all parts of the country including political assassinations, ritual killings and other criminal activities.
“These social menaces, when put together impinge on the security of lives and property in the country. The level of insecurity in the country fueled increasing crime rate and terrorists’ attacks, has severe and adverse consequences for the nation’s economy and its growth.
“The activities of terrorists known as Boko haram, has led to many deaths as well as displacements which has impacted business activities and food production negatively in the northern part of the country.”
The report revealed that a total of 38,875 people have been reported killed by the activities of the terrorist so far.
The report quoted Internal Replacement Monitoring Centre (IDMC) as saying that in 2018, 541,000 people were displaced in Nigeria. Of the number, 200,000 took place in the Middle Belt region and the rest as a result of Boko Haram insurgency in the North-East region of the country.
The report further stated that about 2.2 million remained displaced due to these conflicts as of end of 2018.
These replacements, the report said, negatively impacted business activities and their potential contribution to economic growth and development of the country.
Effect of Insecurity on Economic growth:
“Virtually in all the geo-political zones of Nigeria, there are entrenched structures of violent conflicts – whether it is in the oil-producing Niger Delta Region of the South-South, where resource control and environmental conflict waged by ethnic groups have tended to threaten the stability of the region and the country at large, or the South-West, where the youths are the principal protagonists of ethnic and communal violence, the story is the same. In the three geo-political zones of the North, incessant outbreaks of ethno-religious conflicts and disputes relating to land rights and community squabbles between “indigenes” and “settlers” is commonplace. In the South-East, social fragmentation is compounded by political turbulence. The Northern part of the country is bedeviled with Boko Haram insurgency, cattle rustling, and kidnappings amongst others.”
Insecurity Implication on Investment:
“The implication of the insecurity situation in Nigeria for business activities can be viewed from two broad perspectives, namely: the perspective of the potential investment and the perspective of existing business enterprise.
“On the potential investment, insecurity discourages investment as it makes investment unattractive to investors. This is because; it increases the cost of doing business either through direct loss of goods and properties or the cost of taking precautions against business risks and uncertainties.
“Second perspective has to do with how insecurity affects existing business. This is evident in partial or total disruption of business activities due to displacement or destruction of life and properties which can lead to total loss of investment. In both instances, businesses are affected negatively, investment lost and potential of investments not realized.
“The insurgency in the Northern part of the country and violent conflicts occur most times in the rural areas and local communities where large proportions of food productions are carried out. Insecurity therefore obstructs production of food crops, livestock farming and stifles agro-processing activities. Insecurity or conflict the world over has taken a heavy toll on the quality and quantity of food that people produce as well as require for nourishment.
”The periods of decline production coincide with periods of increased insecurity in the three regions of North-East, North-West and Middle-Belt. This trend depicts that a rise in violence conflicts negatively affects food production.
Effect of Insecurity on Transportation:
“The increasing wave of insecurity in the country generally creates a sense of fear which itself reduces the rate of movement from one place to another. Violent conflicts negatively affect transport services (particularly road transportation) which in turns constrains freight movement and haulage activities needed to move goods and services around the country. This, therefore, hampers distributive trade, tourism activities and other economic activities facilitated by road transportation.
“Nigeria is reported to have one of world’s highest rates of kidnap-for-ransom cases. Almost in all cases, these kidnappings happened along routes travelled by road. Thus, most major roads for transporting goods and services have also become kidnapping dens where people are taken into captivity for ransom payment. The Kaduna-Abuja road for example has become notorious for kidnapping activities recently.
“The annual rate of kidnappings in Nigeria shows that the highest number of kidnappings was recorded in 2015. However, there has been a sudden increase in kidnapping activities in first quarter of 2019, with 685 cases.
Effect of insecurity on Road Transport:
Nigeria’s public transport especially road transport, has been greatly affected by the wave of insecurity in the country, prompting many business owners to reduce their rate of travelling, or moving goods to certain parts of the country while few others have opted for air and rail transportation. In addition to kidnapping, insurgency attacks and destruction of transport infrastructures (bombing of motor parks) has also affected road transportation. For instance in recent past, there have been suicide bomb attacks at motor parks in Kano and Abuja, killing many passengers and damaging properties worth millions of naira.
The way forward
“The increasing wave of armed robberies, farmers-herdsmen conflicts as well as widespread kidnapping activities all around the nation, surely portends great danger and poses a lot of concern as regards the economy and development in general.
“As a way of addressing insecurity challenges, the federal government launched the 2019 National Security Strategy (NSS) with a promise of focusing on human security over state security. Nigeria’s first national security strategy was conceived in 2014 to guide, organize and harness the nation’s security policies and efforts. While it is highly commendable that the government thought it wise to review the existing security strategy in the face of growing security challenges, it is pertinent to state that it would require strong commitment from the government to follow through with the strategies as stated in the NSS.
“The aspect of community policing needs to be taken seriously while also ensuring that the security votes both at federal and state level is used judiciously for security purposes. It is believed that the NSS has such depth and width and covers every aspect of security be it domestically and internationally.
“However, considering the adverse effect of insecurity on national development, it is of utmost importance that the document be fully utilized so as to harness the gains inherent therein.”
As a way forward, the report called on government to ensure concrete and sustainable means of reducing youth employment by stimulating investments.
It also stated that community policing as proposed in the national security strategy should be vigorously implemented to yield its intended outcomes, adding that government should initiate and implement a uniform national security dialing code for prompt responses to insecurity issues.
The report implored government to make aggressive use of modern technology in the fight against insecurity in the country.
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