Security and the rule of law for business development and the Nigerian revolution
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 obvious to the international community. Radical separatist groups, some demanding devolution and others autonomy, have emerged in the northern and southern territories. Although it is a more recent phenomenon, growing Islamic extremism is emerging as another point of great concern for Abuja. The cumulative socioeconomic impact of these activities has been tremendous.
More than half of the 148 million Nigerians are officially registered as poor, while an estimated 35% of the population lives in extreme poverty. Human development indicators are appalling 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 number of illegal networks, including major international drug routes. Administrative inefficiency and malpractices fueled by billions in annual petrodollar profits have also made it a center for massive economic fraud and corruption. 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 scams called 419 are known for their ingenious 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 assault, robbery, kidnapping and extortion, involving both individuals and gangs, are daily occurrences throughout the country. The US state department reports 44 kidnappings of foreign oil workers in Nigeria since 2008.
There are several reasons behind the lawless disrepair in the Nigerian state of affairs:
o Economic disparities arising from non-inclusive policies and exclusive dependence on oil, which destroyed indigenous economies and livelihoods, generated critical levels of inflation and unemployment, and left millions of people plunged into poverty.
o Political misrule, corruption, and neglect of social development projects that over the years alienated the vast majority of Nigerians, amplified urban-rural divisions, and deepened fractures along religious and ethnic lines .
o Flaws in the judicial and law enforcement process, largely due to the existence of multiple criminal justice systems based on criminal codes, Islamic edicts and customary laws that are often contradictory but separately applicable.
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 core 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 radical reforms and restructuring to correct decades of misguided economic policy and reinforce its position as a significant regional and global economic power. Vision 2020 and the Millennium Development Goals have forced the government to focus more on the rapid development of SMEs as a means of driving accelerated economic growth. Nigeria’s long-term goals fundamentally depend on achieving rapid business development in all sectors to sufficiently diversify and consolidate the non-oil economy. Given the enormous imbalances that continue to plague the system, what the country indeed needs is a sustained business revolution that channels its vast economic potential into determined momentum. Reinforcing the security situation is one of the first obstacles on the way.
The Nigerian federal government suffered an estimated $ 20 billion in oil production and export deficit losses 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 from aborted contracts, production delays, and business closures due to security concerns. Even more significant are the repercussions on latent economic sectors such as tourism.
The Nigerian government admits the possibility of earning more income 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 contribution of the hotel and restaurant sector to GDP increased from 4.9 billion to 6 billion naira. Following these indicators, the Nigerian Tourism Development Corporation understandably relies on the country’s development as a world-class circuit of important 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 severe warnings against traveling to Nigeria unless it is absolutely essential.
A similar saying 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 funds were concentrated in the oil industry. The security situation is largely responsible for a very small fraction of FDI reaching other sectors, as well as preventing expatriate Nigerians from investing in their home country. The specter of violence and lawlessness has proven to be a strong deterrent against business ventures in the Nigerian diaspora, a critical flaw that keeps billions of dollars in potential investments away. 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 too great.
The following are some of the broad and specific measures that the government should consider to resolve the situation convincingly:
o Correct the administrative legitimacy deficit by addressing the core problems that fuel violence and organized crime. Genuine grievances and concerns must be addressed effectively to quell popular discontent.
o Use economic growth and prosperity at the ground level as a weapon to isolate extremist and criminal elements, effectively denying them the public support and collaboration on which their operations depend.
o Improve the effectiveness of security operations in sensitive areas through better strategy, greater vigilance across industry clusters, and better cooperation between state and federal law enforcement agencies.
o Reassessment of the centralized police in favor of the delegation of powers for the control and deployment of the 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, increasing transparency in governance; initiate effective measures against corruption and bureaucracy.
The economic expansion in Nigeria is fundamentally linked to internal security and the effective rule of law. The country’s high crime rate, frequent community violence, and deep ethnic divisions are highly 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 investments, if it is to achieve these goals.