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Our Take: Insecurity and terrorism have posed a significant threat to Nigeria’s government in recent years. The operations of the Islamic sect Boko Haram have resulted in the loss of lives and property across Nigeria, particularly in the north. Despite the government’s efforts to address the difficulties posed by terrorism and insecurity in the country and put a stop to them, the pace of insurgency and insecurity remains frightening. The government should declare war on terrorism and seek assistance/advice from worldwide communities that have encountered similar challenges in the past and succeeded in dealing with them.
Introduction
Terrorism is the use of violent action in order to achieve political aims or to force government to act (Oxford Advanced Learners Dictionary). It can also be seen as using violent or threat to obtain a political objective. Terrorism has become a hydra headed monster characterized by unprecedented and unpredictable threats, both domestically and internationally and has kept governments of developed and developing countries on their toes. It has become one of the most complex and complicated phenomenon of the contemporary world (Stibli, 2010). The current wave of terrorism now poses a greater threat than ever before. It has caused sufficient harm to society in areas of loss of lives and property, economic loss by diverting foreign direct investment (FDI) from target countries to other non-target countries; crowd out government resources meant for development purposes by government channeling a large part of its revenue into security vote.
The world has recorded a lot of terrorist attacks. Some of these incidents include; the Euskadi Ta Askatasuna (ETA) attacks on hotels and resorts in 1980s in Spain; the Irish Republican Army (IRA) attacks on London’s financial district at the Baltic Exchange (April 10, 1992) and Bishopsgate (April 24, 1993); attacks on London’s transport system in July 7, 2005; the al-qaida attack on the world trade center in September 11, 2001(9/11) (Gaibulloev and Sandler, 2009). Others include recent attacks in kenya, Pakistan, Nigeria, etc.
The level of insecurity and terrorism in Nigeria both in the northern and southern part has become a major issue for the government. Since 1990 when the activities of the Niger Delta militants started until recent times when Boko Haram insurgents arose in the Northern part of the country, Nigeria has witnessed unprecedented security challenges. These challenges ranges from kidnapping, suicide attacks, bombings, ritual killings, assassinations, armed robbery, and this has led to the destruction of lives and properties, hindered business activities, discouraged local and foreign investors, increases government expenditure on security, all of these stifles and retards Nigeria’s socio-economic development (Ewetan and Urhie, 2014). The events surrounding September 11, 2001 and other recent events of terrorism across the globe especially the current wave of terrorism in Nigeria, has focused our minds on issues of terrorism and insecurity. This study therefore aims at ascertaining empirically the impact of terrorism and insecurity on economic development in Nigeria. Earlier empirical studies focused more on insecurity. Thus, the impact of terrorism on economic growth deserves study.
Conceptual Issues on Insecurity and Terrorism
Concept of Insecurity: The concept of insecurity is a crosscutting and multi-dimensional concept which has been subject to debates. Insecurity is viewed differently by different researchers, some associating it with how it affects individual lives and existence.
UNDP (1994) sees human security to include chronic threats like hunger, disease and repression. The state of fear or anxiety stemming from a concrete or alleged lack of protection or inadequate freedom from danger is seen as insecurity (Beland, 2005; Achumba, Ighomeroho and Akpor-Robaro, 2013). In another view, Achumba et.al. (2013) opined that insecurity is a state of being subject to danger, exposed to risk or anxiety. A person or think is said to be secured when not being exposed to any form of danger or risk of physical or moral aggression, accident, theft or deterioration (Eme and Anyadike, 2013).
For the purpose of this paper, insecurity is seen as a chronic threat to human life, territories, states, religious beliefs, properties and institutions among others. It should be noted, notwithstanding, that there is no consensus definition of insecurity since it is often approached from different perspectives.
Analyst have examined different sources of insecurity. Cameron and McCormic (1954) pointed out some sources of insecurity. They include: emotional response to sudden external threat from within; relatively constant threatening external situation; threat from within; threat to beliefs especially religion.
Achumba, Ighomeroho and Akpor-Robaro (2013) identified two (2) major sources of insecurity: remote factors, and immediate and proximate factors. The remote factors include: lack of institutional capacity resulting in government failure; pervasive material inequalities and unfairness; ethno-religious conflicts; conflict of perceptions between the public and government; weak security system; loss of socio-cultural and communal value system. On the other hand, immediate and proximate factors include: porous borders; rural/urban drift; social irresponsibility of companies; unemployment/poverty; terrorism.
Concept of Terrorism: Terrorism is seen as a dimension of insecurity. It is a premeditated use of threat or violence by subnational groups to obtain a political or self-interest objectives through intimidation of people, attacking of states, territories either by bombing, hijackings, and suicide attacks, among others. It implies a premeditated, political motivated violence perpetrated against non-combatant targets by subnational groups or clandestine agents ( US Commission, 2012; Ogbonnaya and Ehigiamuose, 2013).
Two types of terrorism have been identified; domestic and transnational. Domestic terrorism involves the activities of terrorist in a host country, and their targets are fellow citizens, their properties and the countries institutions and policies either for political reasons or otherwise. For instance, the activities of Boko Haram terrorist in Nigeria, Tamils in Sri Lanka. On the other hand, transnational terrorism involves more than one country. This can stem from the victims, targets, institutions and supporters, terrorist or implications (Sandler and Ender 2008). A good example of transnational terrorism is the US attack of 9/11.
Review of Related Studies
Several studies (empirical and descriptive) have shown that terrorism and insecurity hinders growth and development of a nation. Nwanegbo and Odigbo (2013) noted that security avails the opportunity for development of a nation. Ewetan and Urhie (2014) noted that insecurity hinders business activities and discourages foreign and local investors. Adegbami (2013) in his study opined that insecurity is detrimental to general well-being of the people, and has led to destruction of business and properties, and relocation of industries. Udeh and Ihezie (2013) also noted that insecurity challenges Nigeria’s effort towards national economic development and consequently its vision 20:2020, and scares the attraction of foreign investment and their contributions to economic development in Nigeria. Gaibulloev and Sandler (2009) noted that terrorism (transnational terrorist attacks) had a significant growth- limiting effects and that terrorist incident per million persons reduces gross domestic product per capita growth by 1.5% in Asia. On the other hand, terrorism increases risk and uncertainty that limits investment and hinders foreign direct investment (Gaibulloev, 2009; Abadie, and Gardeazabal, 2008). Terrorism affects industries like airlines, tourism, manufacturing companies, and export sector, which can reduce gross domestic product and growth (Enders and Sandler, 2006.)
Blomberg, Hess and Orphanides (2004) carried out a study on 177 countries ranging from 1968 to 2000 (pooled cross section data). The panel estimates showed that terrorism has a small effect on per capita income growth for all samples, and it reduces investment. Tavaries (2004) carried out another study on the cost of terrorism, using sample size ranging from 1987 to 2001. The result showed that terrorism had a significant but negative impact on GDP growth. Gupta et al (2004) studied the impact of armed conflict and terrorism on macroeconomic variables, using a sample size of 66 low- and middle –income countries. It was observed that conflict indirectly reduces economic growth by increasing the defense spending share of government expenditure.
Eckstein and Tsiddon (2004) investigated the effect of terrorism on the macro economy of Israel, using quarterly data from 1980 through 2003. Applying vector autoregression (VAR), the result showed that terrorism has a significant negative impact on per capita GDP, investment and exports.
Gaibulloev and Sandler (2009) in their study ‘the impact of terrorism and conflicts on growth in Asia 1070-2004’ observed that transnational terrorism attacks had a significant growth-limiting effect. it reduces growth by crowding- in government expenditures. Achumba, et. al (2013) in their study insecurity in Nigeria and its implication for business investment and sustainable development indicated that insecurity challenges in the country is enormous and complex and would continue to be, if the situation remains unabated.
Otto and Ukpere (2012) carried out a study on national security and development in Nigeria. They observed that there is a positive relationship between security and development while insecurity is debilitating to the economic development of many less developed economies. Sandler and Ender (2008) concluded that ‘given the low intensity of most terrorist campaigns, the economic consequences of terrorism are generally very modest and short-lived. The economic influence of terrorism is anticipated to surface in specific sectors that face an enhanced terrorism risk, such as the tourist industry or FDI’. These conclusions were drawn from their study’ Economic consequences of terrorism in developed and developing countries
Terrorism and Insecurity in Nigeria
In recent times, Nigeria has witnessed an unprecedented level of insecurity and terrorism since the advent of the present democratic dispensation. The pattern of insecurity has been regionalized: militia groups in the south, insurgency in the north, kidnapping in the east and south, ritual killings in the east and west, political and non- political calculated assassinations across the nation. The regional pattern of insecurity has given rise to regional security formation in the country in a bid to curtail the alarming rate of insecurity.
Boko Haram emerged as a radical fundamentalist Islamic sect, formed by Ustaz Mohammed Yusuf, in 2002 in Maiduguri, Borno state. In 2004, it moved to Kanamma, Yobe state, where it set up a base called Afghanistan (Ikenga and Efebeh, 2013). The sect officially calls itself “Jama’atul Alhul Sunnah Liddo’ wati Wal Jihad” which means “people committed to the propagation of the prophet’s teachings and Jihad” (Nwanegbo and Odigbo, 2013; Ikenga and Efebeh 2013; Meehan and Speier, 2011). Their violent activity started in 2009. Table 1 shows the summary of the violent attacks and activities carried out by the sect. Other crimes committed by these Islamic sect include; destruction of vehicles; burning of churches, police stations, schools, hospitals, clinics, shops, army barracks and residential houses; adoption of expatriates.
The crises in the Niger Delta region which started in the 1990s, arising from the activities of the different militant groups has brought negative implication on economic development in Nigeria (Nwogwugwu, et. al. 2012). These militant groups include; The Movement for the Survival of the Ogoni People (MOSOP), Ijaw Youth Congress (IYC), Movement for the Emancipation of the Niger Delta (MEND), The Niger Delta Vigilante Force (NDVF), The Niger Delta People’s Volunteer Force (NDPVF), among others. These militant groups have carried out deadly and paralyzing attacks on oil and gas facilities, Nigerian Naval officers, oil company staff, killing some and leaving others badly injured. Other criminal activities carried out by the groups are hostage taking/kidnapping, bombing (Abuja, October 1, 2010), raping, assassination, among others. Another major insecurity challenge facing Nigeria currently is the activities of the Fulani Herdsmen. Several attacks have been carried out by these herdsmen in all parts of the country, killing people and rendering others homeless. Below is a table showing some of the activities of these herdsmen.
The government has taken steps to reduce violence in the Niger Delta region through its Amnesty Programs. The militants are now partaking in vocational training programs and business.
The Research Method
Model Specification: For this study, nominal gross domestic product (GDP) is used as a proxy for economic development (dependent variable) while terrorism and insecurity are independent variables. The study also included in the model government expenditure on internal security.
Estimation Technique: The technique employed in estimating this model is the Ordinary Least Square (OLS) method, given its BLUE (Best Linear Unbiased Estimator) properties (Iyoha, 2004). The expectation is that terrorism and insecurity hampers economic development while government expenditure on security helps to reduce the impact of the activities of terrorist on economic development thereby affecting development positively.
The Data: The data for this study are drawn from three sources: Central Bank of Nigeria Statistical Bulletin Dec.2012, Newspapers, and crime statistics. The scope of the study is from 1990 to 2012 and it covers the activities of Niger Delta Militants which started in 1990, and the attacks of terrorist which also started in early 1993(bombings) but became more intense with Boko Haram activities. The data on terrorism was generated from the events of terrorist while that of insecurity was generated from events of Militant, Fulani herdsmen and other crimes records. The macroeconomic variable (GDP) and government expenditure on internal security was obtained from Central Bank Statistical bulletin, Dec. 2012.
Presentation of Result
The result shows that the R2 is 94% which implies that 94% of the systematic variation in GDP is explained by Terrorism, Insecurity and Government expenditure on internal security. This means that the model exhibits high degree of goodness of fit. The F-stat. of 65.8 shows that the explanatory variables (Terrorism, Insecurity and security expenditure) are statistically significant in explaining the dependent variable (GDP) at 1% level of significance. t- Statistic of insecurity (2.077) implies that insecurity is statistically significant at 5% level in explaining economic development. Its negative coefficient implies that insecurity impacts negatively on economic development by 0.09%. Expenditure on security is statistically significant in explaining insecurity, at 1% level of significance judging from its t-statistics of 8.453. Its positive coefficient shows that expenditure on security has helped to reduce the effect of insecurity and terrorism on economic development. t- Statistic of terrorism (0.571230) shows that terrorism is not statistically significant in explaining economic development at 5% level of significant. Its negative coefficient implies that it impacts negatively on economic development by 0.05%. Durbin Watson value is 2.073 after correcting for autocorrelation {AR(1)}. This implies that the residuals are not serially correlated. Therefore the regression parameters are relevant and statistically significant.
Concluding Remarks and Recommendations
Insecurity and terrorism has been a major challenge to the Nigerian government in recent times. The activities of the Islamic sect (Boko Haram) have led to loss of lives and properties in the country especially in the Northern part of Nigeria. Some of these activities include bombing, suicide bomb attacks, sporadic shooting of unarmed and innocent citizens, burning of police stations, churches, e.t.c. Kidnapping, rape, armed robbery and political crises have been another major challenge facing the country. This has implications for the development of the Nigerian Economy. This study has shown empirically that terrorism and insecurity impacts negatively on economic development in Nigeria. It has made government to divert resources meant for development purposes to security votes. This finding is in line with other studies on different countries of the world. Nigeria has been included among one of the terrorist countries of the world. Many lives and properties have been lost and a large number of citizens rendered homeless. Families have lost their loved ones. Many women are now widows. Children become orphans with no hope of the future. Government has made frantic effort to tackle these challenges posed by terrorism and insecurity in the country and put an end to it but the rate of terrorism and insecurity is still alarming. It is therefore recommended that,
- Government should declare war on terrorism and seek assistance/advice from international communities who have in the time past faced this kind on challenge and were able to tackle it.
- The Nigerian Military should be empowered more with arms to fight this insurgency.
- Government should also beef up more security in the eastern and southern parts of the country.
Grazing grounds or/and ranches should be built in all states of the country for Fulani herdsmen who rear cattle. This will help to stop the killing of farmers whom they graze cattle on their farms.
Recommendation(s):
• The government should declare war on terrorism and seek assistance/advice from global communities that have encountered similar challenges in the past and were able to overcome them.
• To combat the insurgency, the Nigerian military should be provided with more weapons.
• The government should also increase security in the country’s eastern and southern regions.
• Grazing grounds or ranches for Fulani cattle herders should be developed in all states of the country.
Source: Social Science Research Network
