Security and rule of law for Nigeria’s development and business revolution
As significant as it was, the return to relative political stability did not bring about the automatic cessation of internal divisions and hostilities that one might have wished for. Nigeria’s volatile economic and political unity remains a threat to its security and stability. The existence of potentially destabilizing forces within its borders has long been apparent to the international community. Radical separatist groups, some demanding devolution and others autonomy, have sprung up in the northern and southern territories. Although a more recent phenomenon, growing Islamic extremism is emerging as another serious concern for Abuja. The cumulative socioeconomic impact of these activities has been tremendous.
More than half of the 148 million Nigerians are officially classified as poor, while an estimated 35% of the population lives in extreme poverty. Human development indicators are abysmal across the board and many see this condition, which exists despite considerable national wealth, as the main reason behind its emergence as a prominent center of international criminal activity. This brings up the second important aspect of Nigeria’s internal security: crime and the rule of law.
The spectrum of criminal activity in Africa’s second largest economy and its most populous nation is understandably vast and diverse. The country’s strategic location makes it a key transit point for a host of illegal networks, including major international drug routes. Administrative inefficiency and malpractice fueled by the billions in annual profits in petrodollars have also made it a hub of corruption and massive economic fraud. In fact, the country was listed by the Intergovernmental Financial Action Task Force as a non-cooperative country until 2006, when it finally issued formal commitments to combat economic crime. Nigerian 419 scams are known for their clever ways of targeting foreigners around the world and causing both monetary loss and personal injury. The situation is much more disturbing at the street level, where armed robberies, robberies, kidnappings and extortions, involving both individuals and gangs, are daily occurrences throughout the country. The US State Department reports 44 kidnappings of Nigerian foreign oil workers since 2008.
There are several reasons behind the lawless mess in the Nigerian situation:
o Economic disparities arising from non-inclusive policies and exclusive reliance on oil, which destroyed indigenous economies and livelihoods, generated critical levels of inflation and unemployment, and left millions teetering in poverty.
o Political misrule, corruption, and neglect of social development projects that, over the years, have alienated the vast majority of Nigerians, widened urban-rural divides, and deepened religious and ethnic fractures.
o Flaws in the law enforcement and judicial process, largely due to the existence of multiple criminal justice systems based on penal codes, Islamic edicts, and customary laws that often conflict but are applied separately.
o Legislative castration caused by decades of military rule. This severely restricts the government’s ability to enforce relevant policies and obtain sufficient oversight and oversight of basic development programs.
While this by no means exhausts the list of challenges facing Nigeria, the return of civilian rule sparked a triumphant renewal of national ambitions. Abuja embarked on a process of sweeping reforms and restructuring to correct decades of misguided economic policy and strengthen its position as a major regional and global economic power. Vision 2020 and the Millennium Development Goals have forced the government to sharpen its focus on the rapid development of SMEs as a means of driving accelerated economic growth. Nigeria’s long-term goals critically depend on achieving rapid business development in all sectors to sufficiently diversify and consolidate the non-oil economy. Considering the huge imbalances that continue to plague the system, what the country indeed needs is a sustained business revolution that harnesses its vast economic potential in a single determined push. Strengthening the security situation is one of the first obstacles on the road.
The Nigerian federal government suffered an estimated $20 billion in losses from oil production and export shortfalls in 2008 due to militant violence in the Niger Delta region. While this is a considerable amount, it pales in comparison to the billions more it loses annually due to voided contracts, production delays, and business closures due to safety concerns. Even more significant are the repercussions on latent economic sectors such as tourism.
The Nigerian government admits the possibility of earning more revenue from tourism than from oil, and has lately been involved in developing a tourism profile to attract international travelers. Between 2000 and 2004, international air arrivals increased from 12,000 to 190,000, while the hotel and restaurant sector’s contribution to GDP increased from Naira 4.9 billion to Naira 6 billion. By these indicators, the Nigerian Tourism Development Corporation is understandably confident of developing the country into a world-class circuit of major monuments, landmarks, nature retreats, and heritage sites. However, tourism, as a profitable economic activity, is practically non-existent in this corner of sub-Saharan Africa; not surprising considering the long list of nations that have stern warnings against traveling to Nigeria unless absolutely essential.
A similar opinion seems to guide the investments that flow into the country. Foreign direct investment (FDI) in Nigeria exceeded $62 billion in 2007, well below desirable levels considering that most of the funds were concentrated in the oil industry. The security situation is largely to blame for a very small fraction of FDI reaching other sectors, as it prevents expatriate Nigerians from investing in their home country. The specter of violence and lawlessness has proven to be a strong deterrent against Nigerian diaspora business ventures, a critical flaw preventing potential multi-billion dollar investment. Where countries like India and China have reaped huge benefits from expatriate investment, Nigeria has been far less fortunate because the risks involved in doing business in the country are just too great.
The following are some of the general and specific measures that the government should consider in order to convincingly resolve the situation:
o Correct the administrative legitimacy deficit by addressing the core issues that fuel violence and organized crime. Genuine grievances and concerns must be effectively addressed to quell popular discontent.
o Weaponizing economic growth and prosperity at the grassroots level to isolate extremist and criminal elements, effectively denying them the public support and collaboration on which their operations are based.
o Improve the effectiveness of security operations in sensitive areas through better strategy, increased surveillance across industry clusters, and better cooperation between state and federal law enforcement agencies.
o Reassessment of centralized police in favor of delegated powers for the control and deployment of police forces. Nigeria’s federal structure and complex state laws make a strong case for a decentralized police force.
o Maintain the authority of democratic institutions and the rule of law by increasing transparency in governance; initiate effective measures against corruption and red tape.
Nigeria’s economic expansion is closely linked to internal security and the effective rule of law. The country’s high crime rate, frequent community violence, and deep ethnic divisions are seriously detrimental to both business development and sustainable growth. Nigeria must be able to firmly reposition itself as a safe destination, both for tourists and for investment, if it is to achieve these goals.
