The activities of banditry, Boko Haram insurgency, farmers-herdsmen conflict, separatist agitation and organised violent groups, among others, cost the federation a whopping sum of $10.3 billion in 2020, the Presidential Economic Advisory Council (PEAC) has disclosed.
The economic council gave the figure in a document presented during its sixth regular meeting with President Muhammadu Buhari at the State House, Abuja penultimate Friday, detailing the socio-economic cost of insecurity across the federation.
Buhari had constituted the council under the chairmanship of Prof Doyin Salami to replace the Economic Management Team (EMT), which Vice-President Yemi Osinbajo earlier set up to advise the National Economic Council.
The council, at its sixth regular meeting, dissected the country’s economic environment with a strong indication that insecurity resulting from Boko Haram insurgency, political violence, resource-based violence, organised violence and farmers-herdsmen conflicts had crippled economic activities nationwide and contracted the country gross domestic product (GDP) by 2.6% in 2020.
The council cited the grievous consequences of ethno-religious conflicts mostly caused by suspicion and distrust among various ethnic groups and among the major religions in the country.
Examples of such conflicts, as the council documented in its 33-slide presentation, are Boko Haram, conflicts in Southern Kaduna as well as farmers-herdsmen clashes in the Middle Belt, especially Benue State.
The council observed that there was a general consensus of a worsening of the security situation in Nigeria, which it said, included competition for power and ultimately resources, usually around the general election.
Resource based violence, according to the council in its presentation, comprised competition for economic opportunities driven by illegal mining in some states, kidnapping for ransom, Niger Delta militants and pirates and recent farmer-herder conflicts.
The council dissected the dynamics of violent farmers-herdsmen conflict, mainly among groups that peacefully co-existed previously, exacerbated by infiltration of foreigners on the one hand and climate change and environmental challenges on the other hand.
Citing incontrovertible statistical evidence, the council claimed that nationwide insecurity had multidimensional implications, especially for economic and human development.
In terms of economic cost, the council disclosed that insecurity had cost Nigeria $10.3 billion or 2.6% of the GDP, which dropped $568.5 billion in 2014 to $375.75 billion in 2017 and rose to $448.12 billion in 2020.
The presidential council equally cited a study by the United Nations Development Programme (UNDP) estimating that Nigeria lost $141.9 billion of production to security related violence between 2007 and 2019, a period of 16 years.
The council analysed the impact of human capital, which according to its slide presentation escalated the population of out-of-school children to over 13 million and significantly reduced life expectancy nationwide.
While it claimed that extreme poverty in the conflict zones was accentuated by conflict, the council observed that unemployment rate, currently standing at 33.33%, had steadily increased since 2014, in line with worsening insecurity, thus adding to the population of persons that had fallen below the poverty line.
At large, the council said: “Conflicts and heightened insecurity reduce business confidence, manifested in declining foreign and domestic investment, deteriorating financial sector performance, higher fiscal cost and security spending.”
Consistent with PEAC’s report, as shown in complementary data obtained from the NBS, the volume of the FDI inflow dropped from $2.28 billion in 2014 to $1.03 billion in 2020, accounting for 54.83%.