The Lagos Chamber of Commerce and Industry (LCCI) has expressed dismay over the negative impact of insecurity on Foreign Direct Investments (FDIs) into the country and the business community adding that it has reduced the possible benefits that security brings to the macroeconomic performance of countries.
Indeed, the Chamber decried Nigeria’s inability to attract FDIs as a result of the high level of insecurity noting that despite efforts from the government in securing the country and maintaining peace, the security situation has continued to disrupt supply chains, caused anxiety and apprehension with increasing economic cost from the impact of insecurity.
LCCI president, Mrs. Toki Mabogunje at the LCCI 2021 Security meets business dialogue series in Lagos, said in the 2021 Appropriation Act (the 2021 Federal Government Budget), defence expenditure was allocated N840.56 billion, far more than any other sector, adding that in 2020, the Ministry of Defence received N878 billion.
“In the course of the year, another supplementary budget worth about N983billion was approved for the procurement of equipment for the military and medical infrastructure as well as COVID-19 vaccines.
“This vote of resources to defence operations shows the commitment of the government to making Nigeria a safer and more peaceful nation,” she said.
She however, noted that according to the 2020 Global Peace Index by the Institute of Economics and Peace, the economic impact of violence increased in 2019 to a total of $453.1 billion, or $433 for each person in sub-Saharan Africa.
In her words, “Insecurity does not only impact on the society, but it also reduces the positive benefits that security and peace bring to the macroeconomic performance of countries. Since 2000, countries that have improved in security and peace have seen an average 1.4 percentage points higher GDP per capita growth when compared to countries that have become less peaceful as measured by the Global Peace Index (GPI).
“Furthermore, the average inflation and unemployment rate for the countries with the largest security improvements were substantially lower than those with the largest deterioration.”
She recommended that for the government to achieve better results in tackling insecurity, a key turning point should be to understand the causes of insecurity as well as to investigate the sources of social disorder and instability.
Speaking further, she pointed out the need for collective and integrative security architecture by the federal, state, and local governments in Nigeria, adding that this arrangement should produce a strong and coordinated presence at village, community, local, state, and federal levels with the responsibility of providing sensitive security information for security agencies in their areas of operation.
“This will assist in identifying criminals, their sponsors, and hideouts in the country. We urge the government to sustain the needed funding for defence operations to equip the military with advanced weaponry and intelligence infrastructure. These should be supported by heavy deployment of modern military intelligence technologies,” she said.
She also commended the unrelenting efforts of the government in combating insecurity in the land while also reiterating its commitment to supporting the government in resolving the current insecurity crises.
The Chief of Naval Staff, Vice Admiral Az Gambo, said according to the 2021 report of the Institute of Economic and Peace, stated that 8 per cent of Nigeria’s Gross Domestic Product (GDP) representing over N50 trillion is being impacted economically by the growing violence across the country while stating the urgent need to address the high level of insecurity in the country.