Nigeria has long been regarded as one of Africa’s economic powerhouses due to its abundant resources and diversified populace. As a developing nation, Nigeria grapples with several security challenges that directly impact its economy, ranging from insurgency to conflicts between farmers and herders to organized crime looting and abduction for ransom. These security threats not only undermine national stability and the rule of law but also have adverse effects on the economy, affecting price, output, employment, trade balance, poverty, inequality, defense expenditure, government budget patterns, socio-political environment, and several others.
There is a high level of insecurity in the country, particularly in the northern region, where the Islamist jihadist group, Boko Haram, has become a threat to business activities. The lack of security continues to deter prospective investors from engaging in business activities in these areas, leading to a stagnation of commercial operations. Consequently, many companies and businesses in northern Nigeria have stopped operations due to the scourge of lingering insurgency. Banditry has severe and far-reaching consequences for the economy of the affected areas, and the incessant activities of bandits have created a pervasive sense of fear and insecurity, directly impacting economic activities and development in the region.
Given the region’s predominant reliance on agriculture as the cornerstone of its economy, the presence of bandits has disrupted agricultural activities, as farmers are often afraid to cultivate their fields due to the risk of attacks. This disruption has led to a decline in food production, threatening food security for millions of people. The displacement of over 200,000 individuals has also resulted in the abandonment of farmlands, exacerbating the food crisis. Banditry has forced many people to flee their homes, abandoning businesses and livelihoods. The economic displacement of individuals and communities has created a ripple effect, affecting local markets, small businesses, and overall economic productivity. While the north continues to be a hotspot for insecurity, there is a troubling trend emerging in the south, where security crises are gradually encroaching, posing a new set of challenges for the region.
Livestock farming is also a crucial economic activity in the northwest, and the involvement of bandits has led to the rustling of cattle and other livestock. This not only results in economic losses for herders but also disrupts meat and dairy products supply chain. The prevailing insecurity discourages both domestic and foreign investments, and the lack of a secure environment undermines the implementation of developmental projects that could otherwise contribute to the region’s economic upliftment.
Lately, abduction for ransom has become the new money-making venture for kidnappers, having recorded an average of 13 persons abducted daily in Nigeria in the first half of 2021. Within six months, this translated to a harrowing 2,371 individuals falling victim to kidnapping. In 2024, over a hundred abduction cases have been recorded by the police. This surge in abductions has instilled a pervasive sense of fear and uncertainty among the populace, with many feeling increasingly vulnerable to such threats. The rich think they are the target; meanwhile, in the case of Nigeria’s insecurity, there are no targeted groups, just victims of different tribes and classes.
As a result of insecurity in the country, many businesses and companies are closing down operations and relocating to other African countries for fear of loss of lives and properties. In contrast, the few remaining companies operate on a skeletal basis while being apprehensive about their lives and properties. The incessant kidnappings have affected foreign direct investments, interstate travel, and transportation of goods and services from one state to another. The resulting loss of income and economic opportunities further compounds the challenges faced by the affected population. The livestock sector is also adversely affected since many bandits are reportedly from pastoral communities.
The government’s response to banditry requires an efficient allocation of resources toward security operations. Consequently, funds that could have been utilized for developmental projects, infrastructure, and poverty alleviation are redirected toward combating security threats. This diversion limits the country’s financial capacity to address other pressing economic issues. The impact of banditry on the economy is multifaceted and deeply concerning. Addressing the security situation is imperative, not only for the population’s safety but also for the economic stability and development of the country.
Although the Nigerian government’s approach to combating terrorism has varied, given the complexity of the security situation in Nigeria, communities’ resilience against terrorism and enhanced cooperation between law enforcement agencies should be built into projects and programs designed to combat insecurity along with economic, political, and social tensions.
To tackle insecurity comprehensively, it is essential to establish an efficient network of intelligence gathering and analysis in Nigeria. An intelligence hub should be set up in this network to coordinate efforts between the various government agencies, support interagency collaboration, engage information-gathering communities, use technology for surveillance and data analysis, invest in human intelligence agents, strengthen international cooperation, and develop risk assessment frameworks to ensure accountability and oversight.
The absence of government and security infrastructure in numerous parts of Nigeria constitutes a pressing issue. As a result, residents are at the mercy of any criminal element that rises above them. Prioritizing the establishment of robust security measures in rural areas is crucial to safeguarding communities against potential risks.
Keeping in mind that most security threats are within the hinterlands, the government should establish, empower, and fund community policing initiatives and engender partnerships between law enforcement agencies and citizens to engage local communities in security efforts. Community members can provide useful information, help prevent crime, and identify and arrest offenders who operate within their territories.
Comprehensive efforts are needed to restore peace, encourage investment, and revive economic activities that will alleviate the widespread poverty and food insecurity exacerbated by the current state of insecurity. It is therefore recommended that the government must reduce the level of unemployment in Nigeria, as political instability is encouraged by the high level of unemployment. Many graduates possess the necessary skills and education to contribute to economic growth but are unemployed.
Strengthening prosecution and legal actions to ensure perpetrators of offenses such as terrorism, insurgency, banditry, or kidnapping are swiftly apprehended, prosecuted, and held to account under the law. There is a need to look into the consequence management of banditry and terrorism in Nigeria. To speed up trials and secure convictions, this calls for strengthening the capacities of law enforcement agencies, improving their investigative techniques, and working more closely with judicial authorities.
