CHAPTER ONE
INTRODUCTION
1.1
Background to the Study
The economic implications of the
growing rate of violence and terrorism in Nigeria can be measured from
different perspectives. The cost of destruction of property and national
productivity are directly affected while there are longer term of indirect cost
in confronting and curbing the menace. Not to be forgotten is the human cost,
and that over 4,000 lives have been wasted terror attacks.The challenge of
controlling violent crimes and terrorism have really been very expensive. Security
operations have received the lion’s share of the 2014 budget, based on
estimates submitted by the Federal Government yesterday. This is the third
consecutive yearly budget that gives the security sector the highest
allocation.
Finance Minister Ngozi Okonjo-Iweala
submitted the N4.91 trillion appropriation bill to the two chambers of the
National Assembly in Abuja Out of the total budgeted sum, about N1.1 trillion,
representing 27 percent, is for capital expenditure, while N2.43 trillion will
go for recurrent spending. The remaining amounts are for debt service, N712
billion; statutory transfers, N399.7 billion; and Subsidy Reinvestment and
Empowerment Programme (SURE-P), N268 billion. Government’s expected revenue
target is N3.73 trillion, while the budget deficit stands at 1.9 per cent of
the Gross Domestic Product (GDP), slightly up from that of the 2013 budget,
which stood at 1.85 per cent.
Daily Trust obtained a breakdown of
the budget, showing recurrent allocations but no details of capital votes. A
total of N845 billion was provided for recurrent and service-wide votes for the
security sector, which includes the Armed Forces, Police, National Security
Adviser’s office, and the para-military services. This amount excludes the
capital votes for these agencies as those details appeared to be missing from
the bill submitted by Mrs Okonjo-Iweala. If the capital vote is put at 27 per
cent of the total for the security sector, then the security vote could hit
about N1 trillion. This is about the same as the amounts received by the sector
in two previous budgets of 2012 and 2013.
Based on the estimates submitted by
the Finance Minister, recurrent allocation for Defence (including Army, Air
Force and Navy), is N306 billion; police formation and commands, N286 billion;
office of the National Security Adviser, N67 billion; Interior Ministry, N145
billion; and Police Affairs Ministry, N4.5 billion. Also part of the security
spending are provisions under ‘service-wide votes’ for Nigerian Army Quick
Response Group and arrears, N12 billion; and Operations-Internal for the Armed
Forces, N24 billion. In the recurrent budget, education got the next highest
allocation after security, with N373.4 billion. Others are Works, N28.5
billion; Petroleum Resources, N55.7 billion; Science and Technology, N24
billion; Power, N3.9 billion; and Justice N19.4 billion. Information got N22.4
billion, Foreign Affairs N46.5 billion, Agriculture N31.4 billion, Water
Resources N7.7 billion, and Youth Development N75.9 billion. Office of the
Secretary to the Government of the Federation is allocated N46.2 billion, Mines
and Steel Development N10.6 billion, Lands and Housing N5.6 billion, Aviation
N6 billion, and Finance N216.4 billion Other allocations include the Presidency
with N25 billion, whereas the proposed National Dialogue will gulp N700
million, Stipends for 30,000 ex-militants is allocated N23.6 billion, with
another N35.4 billion allocated for transformed ex-militants.
The cost of tackling terrorism in
Nigeria also plunged us deeper into the mire of poverty and political
destabilization, cankerworms that are already eating up the nation’s vast
capital and material resources. In the bid of proffering a workable means by
which they can be terminated. It is saddening to know that the recent state of
insecurity in the country is happening at a time when most of the key
industries in the country have become moribund. What is even more saddening is
that struggle against terror is gradually affecting the transport and tourism
industries which are key to foreign exchange earners, tax revenue generators,
business opportunities for growing entrepreneurs and sources of employment.
Domestically, the fight against
terrorism has caused a clamp down on the popular “Okada” business in states
like Adamawa, Borno and Yobe, leading to the ban on the business in some parts
of the these states. Secondly, interstate travel for business and other
activities has been grossly affected. Indigenes of southern states of the
country are becoming more afraid to visit the north and vice versa.
Internationally, Nigerians are now
being treated with great suspicion. It is our opinion that the recent
repatriation of some Nigerians by the South African and British governments may
not be unrelated to events happening in Nigeria. To crown it all, foreigners
are finding it hard to visit Nigeria. A country once believed to be “Giant of
Africa”, and one of the most colourful countries in the world. The reason is
not farfetched, no “Oyibo” wants to be kidnapped, neither do they want to be
caught in the middle of a crossfire.
With the state of the nation now,
one may not be considered to be totally wrong to say that terrorism and violent
crimes have given Nigeria and Nigerians more bad labels in the last three years
than corruption has done in the 51 years of nationhood. While we may continue
to count the implications of the terrorism and violent crimes on our society
and our economy, it is also necessary for us to begin to plot a new vista for
our nation. True, failure of the government to act in ways that boost public
confidence on such issues have been demonstrating, coupled with that, our
system seems to be providing these destroyers of our society with more reasons
to perpetrate their dastardly acts – the high rate of corruption in high and
low places, the increase in unemployment among a majority of the nation’s
youth, mass illiteracy-cum-ignorance and the hypocrisy of some traditional,
political and religious leaders.
1.2 Statement of the
Research problem
Terrorism in whatever dimension
poses threat and insecurities to human existence in regards to which
defenseless nations live in perpetual fears and anxiety. Knowing full well that
Security is presently a major challenge in Nigeria and Nigerians are killed on
daily basis and in their numbers. Though the government claims to be on top of
the situation but the problem still persists. The effects of these acts of
terrorism are the threats they posed to national security, peace, unity and
development of the country. Incidences of terrorists’ activities have, by most
accounts, provoked electric mix of insecurity and threat to socio-economic
undertakings in recent time. Separating realities from emotions, economic
analysts hold a view that in the event of wanton destruction of lives and
property in any society, investments and other economic developments will
suffer.
The Economic Confidential takes a
critical look at the recent wave of terrorist activities in the country and the
trend they hold for its economy. Generally, analysts agree that terrorism has a
suppressive effect on an economy and study shows that it has actually never
done any good in any part of the world. In Nigeria for instance, it is
inadequate to mention terrorism in Nigeria without reference to the activities
of Boko Haram, a terrorist group which has taken responsibility for most of
attacks in some parts of the country.
The increase in terrorist activities
has, by most analysts’ ratings, complicated the Nigerian business climate and
made it investor-unfriendly. The impact of these nefarious activities on
Nigerian economy has been intense so much that terrorist activities of the
group have created a lot of distortions in the economic activities of the
northern region.
The direct implication of this
includes declining investor confidence and reductions in foreign direct
investment. With reference to the 2012 Doing Business Data of the 183 economies
sampled, Nigeria is ranked 133rd, maintaining the same ranking as that of 2011,
an indication that no significant improvement hastaken place because of
terrorist activities.
In the same manner, the World Bank
Investment Climate Assessment Report for the 2011 fiscal period indicates that
the Nigerian business environment in spite of the ongoing reforms, remain
hostile. According to the report, investors are losing 10 percent of their
revenue as a result of the hostile investment climate, poor quality
infrastructure, crime, insecurity and corruption. It is against this background
that the researcher intends to study the impact of terrorism on the Nigerian
economy with a view of proffering solution to the problem.
1.3
Research Questions
The following are the research
questions:
- What are the impacts of terrorism on the economic development of Nigeria?
- What are the relationship between security and economic development?
- What are the solutions to the problem of security as it affects the Nigerian economy?
1.4
Research objectives
The main objective of this research
is to study the impact of terrorism on the Nigerian economy. Other specific
objectives include:
- To identify the impact of terrorism on the economic development of Nigeria.
- To identify the relationship between security and the economy development.
- To proffer solutions to the problem of security challenge and its impact on economic development in Nigeria.
1.5
Hypothesis of the study
The following are the research
hypothesis
H0:
There is no significant adverse relationship between terrorism and economic
development
Hi:
There is significant adverse relationship between terrorism and economic
development.
1.6
Significance of the Study
This research work will be of great
importance to all the stakeholders involved, particularly in Nigeria. The study
will be of great important to policy makers, security officers, government and
the general public. The knowledge provided in this study will show the causes
of Boko Haram, their impact to the economy and how they can be tackled. It is
of the interest of the researcher that if this project will be strictly
followed it will be a solution to the problem of terrorism in Nigeria.
It will also be of immense relevance
to business men, entrepreneurs, companies, other business owners and managers
because it will guide them on how to locate their business in a place safe from
terrorist attack.
Also, this study would enlighten
governments, Lecturers/academicians, colleagues in the academic and users of
information and the public at large on the dangers of terrorism and how it can
be tackled.
Finally, this study would add to
existing notion and serves as useful preliminary materials for further study in
the area of the study.
1.7 Scope and
Limitation of the Study
The research aimed at studying the
impact of terrorism on the National economic development of Nigeria. The study
will cover the period of 2009- 2014. This period was chosen because it was the
period when terrorism attack was at its peak, most especially in 2014.
Most of time, research work are
subject to certain constraints which constitutes some difficulties to such
studies. Some limitations and problems were encountered on carrying out this
study.
The problem of insufficient
information is a major limitation of this study. This is due to the fact that
you cannot see Boko Haram face to face talk more of getting information from
them.
The information obtained from
interviewing people was limited because people are afraid to supply information
regarding Boko Haram. Adequate time prove to be a problem because of the other
academics work. Moreover for this kind of research there is need for enough
time to carry out the research.
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