A jaw-dropping increase in national security expenditure by the Central Bank of Nigeria (CBN) has captured headlines, as it surged nearly threefold last year to a staggering N125.3 billion.
Combing through the consolidated financial statements, one finds that between 2014 and 2022, the CBN allocated a mammoth N507 billion towards national security efforts, including support for armed forces and bolstering state security.
In a statement, CBN clarified, “When we talk about intervention activity expenses, we’re referring to the funds disbursed by CBN to fortify national security, aid federal and state securities, empower our armed forces, and strengthen the financial sector wherever critical financial needs arise.”
Furthermore, CBN elucidated, “All expenses stemming from these intervention activities are noted when they arise. Nonetheless, when the Group foots the bill for such activities on behalf of the Federal Government, these are acknowledged as receivables. If these funds aren’t recovered from the Federal Government within 12 months, they’re completely impaired.”
Here’s a brief breakdown: the CBN’s expenditures were N45.4 billion in 2021, N28.6 billion in 2020, and the list goes on with billions being spent annually.
Security experts have raised eyebrows, noting that despite the hefty security budgets year after year, terrorism and rampant insecurity issues in Nigeria haven’t seen a decline. The stark reality is that Nigeria, despite its colossal security spending, has not seen proportional improvements in safety.
A 2019 report by the United Nations Development Programme shed light on the economic aftermath of terrorism in Africa, with Nigeria sadly topping the charts in both fatalities and economic setbacks. Astonishingly, Nigeria’s losses amounted to a staggering $40.828 million due to fatalities and injuries, and an additional estimated loss of $598.8 million from property destruction.
The same report indicated that Nigeria’s security expenditure reached a zenith of $78.43 billion in 2017—surpassing even Morocco which spent $42.52 billion. But the juxtaposition is unsettling; Morocco, despite spending less, faced under 2,000 fatalities, while Nigeria suffered a heartbreaking 180,000 fatalities.
Tying economic growth to security, the report unveiled that nations grappling with violent extremism, like Nigeria, are trailing in economic growth. Countries facing significant terrorism saw a staggering 64% GDP growth difference compared to their safer counterparts.
In perspective, from 2002 to 2016, countries at risk saw an average 47% boost in GDP per capita, while nations like Nigeria, the epicentres of conflict, faced a decline of 17% in GDP per capita. Notably, this decline in growth synced with a rise in terrorism post-2006.
Highlighting the consequences on the investment front, the Global Terrorism Index revealed a $40.6 billion loss in investments for Nigeria in 2020 alone due to mounting insecurity.
Beyond the harrowing loss of lives and property, the ever-present cloud of insecurity in Nigeria has sent chilling ripples through the investment community, making many hesitant to invest in the country’s future.