Business Operators Lament Increased Security Spending Amid Growing Insecurity

Business operators have expressed deep concerns over rising costs as they are forced to allocate more funds to security measures in response to escalating insecurity nationwide.

Many operators who spoke with LEADERSHIP, say they are being forced to spend an increasing share of their budgets on security as rising kidnappings, highway attacks, vandalism, and community clashes disrupt operations across key sectors of the economy.

These increased expenses, they say,  have raised their operating costs, thereby cutting into their profits and threatening the viability of their operations.

They reiterated the urgent need for more decisive government action to restore safety and stability.

From manufacturers and logistics companies to agribusinesses and telecom operators, firms say insecurity has become one of the fastest-growing drivers of operational costs, ultimately raising prices for consumers and stifling investment.

In Lagos, Abuja, Kano, and several parts of the South-East and North-West, companies report that what used to be a minimal line item in annual budgets has become a major expense, often exceeding energy, transport, or staff welfare costs.

At a logistics company in Lagos, operations manager Dayo Olaleye said the firm had doubled its security spending  over the last year.

Olaleye said, “Moving goods across states is now a high-risk activity. We hire armed escorts for long-distance trips, pay higher insurance premiums and sometimes avoid entire routes. All these costs are passed down the chain. Eventually, it hits the consumer.”

Feelers from interviews conducted by LEADERSHIP suggest that the situation is even more difficult in the agribusiness sector, where farms have increasingly become targets for bandits and militant groups.

Hajara Ahmed, who runs a mid-sized rice farm in Kaduna, said the farm’s annual security budget has grown by more than 50 per cent since 2022. “We used to focus on irrigation and inputs. Now most of our money goes into securing the fields. Some workers are too scared to return to the farm,” she said.

Telecom operators, already struggling with diesel costs and vandalism, say insecurity is worsening network outages. A senior official at a major telecom company, who requested anonymity, said the firm now deploys armed surveillance to protect critical sites. “Base stations in rural areas are particularly vulnerable. Every time a site is vandalised or staff are threatened, it disrupts service and adds millions to our maintenance bill,” he said.

LEADERSHIP gathered that even in heavily densely populated cities like Lagos, especially its suburbs, thugs, popularly known as agberos, vandalise telecoms cables and even request tips from the companies when they come to repair or replace their cables. A popular telco’s engineer confirmed the development to this medium.

Manufacturers are also feeling the pressure. In Ogun State’s industrial corridor, factory owners say they have had to install additional perimeter fencing, deploy private security guards, and introduce controlled-access systems for staff and visitors. Chukwuemeka Ogamba, who manages a packaging factory in Agbara, said the cost is eroding competitiveness. “Security is now eating into margins. We are competing with companies in Ghana, Kenya, and Egypt who don’t face this level of threat,” he noted.

Economists warn that rising security-related expenses are slowing Nigeria’s recovery by discouraging investment and raising prices. A business environment analyst, Moses Orijiafor, said insecurity is effectively a “shadow tax” on businesses.

“When companies spend heavily on private protection, it acts like an extra tax. It reduces profitability, constrains hiring, and fuels inflation. Many SMEs cannot survive these costs,” he said.

Retailers say the ripple effects are already visible. Fejiro Akpochafor, who runs a chain of mini-marts in the South-West, said suppliers now charge more for deliveries. “Even transporting soft drinks or food items is risky,” she said. “When suppliers increase prices because of security escorts or route diversions, we must adjust our shelves too. Customers are angry, but the truth is that everything is costlier now.”

Analysts warn that unless the government restores confidence by strengthening policing, intelligence gathering, and state-level coordination, businesses may begin scaling back operations or relocating.