THE POLITICAL ECONOMY OF SECURITY CHALLENGES IN NIGERIA; FOREIGN DIRECT INVESTMENT DRIVE

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ABSTRACT

This paper examines the relevant issue of insecurity in Nigeria and its implication for socio-economic development, with the available data on the level and magnitude of insecurity in Nigeria exposes an increase over time, which constitutes serious threat to lives and properties, obstructs commercial activities and discourages local and foreign investors, all which suppresses Nigeria’s socio-economic growth. This rising wave of insecurity has not subsided but has assumed an unsafe facet which is threatening the communal existence of the country as one geographical entity. In the light of the above, the paper recommends that government must be pre-emptive in dealing with security issues and threats, in view of managing security challenges. The real solution lies in government accelerating the pace of economic growth by creating an economy with a relevant social, economic and physical infrastructure to support business and industrial growth. This research paper carries out empirical research on the effect of insecurity and investment on the economy of Nigeria from 2007 to 2017, using three variables as input Nigeria Terrorism Index, Foreign Direct Investment [Inflow], Oil Prices. The study employed the use of correlation and regression techniques to analyse the collected data. Using Nigeria Terrorism Index as a proxy for insecurity and Foreign Direct Investment [Inflow] as a proxy for investment.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

After the 70s in Nigeria, the security circumstance in Nigeria has been moderately steady. Individuals had tranquillity and could move openly initial from one part of the nation onto the next without badgering or attack. Live was accommodating. No issues among various ethnic gatherings living respectively. Everyone attempted to make a decent living. Lives and properties of individuals were secure, given the alarm of security operators like the police, the military, and diverse societal vigilante gatherings. Individuals dreaded to cause issues in light of the anger of the law. Security in the nation was exceedingly kept up. Be that as it may, the instance of difficulty was seen in Nigeria as far back as the year 2000 in some government’s territories in the nation. However, the carelessness of this quick demonstration by the constituted expert at that point influenced it to spread to various parts of the country. Possibly the legislatures at that point were not able to understand its unfavourable impact over the long haul. As of late, their activities have constituted a great deal of danger to the whole populace and appear to have exacerbated with high-security investors in the nation. The inquiry is in the presence of this large pattern, what at that point is security in the country? Security as per (Nwagboso, 2012) is the demonstration of being sheltered from damage or peril, the safeguard, assurance, and protection of qualities, and the nonattendance of dangers to gained esteems. Security is about survival and the state of human presence.

Security likewise exists when individuals live respectively in a specific domain without unsettling influence or savage. In a similar vein, (Adejumo, 2011) states that security is the demonstration of keeping peace inside the overseeing regions. It is done by maintaining the national law and protecting the hidden security dangers in various territories of the nation. In like manner, (Adebakin, 2012) likewise saw security as the opportunity from peril or risks, and the capacity of a country to ensure and create itself, advance and treasure esteems and honest to goodness premiums and upgrade the prosperity of its kin. It can be kept up through an interior security framework. Usually, inner security framework in any general public is imperative since it is utilised to anticipate brutality and criminal exercises in various social orders. Inside security additionally guarantees opportunity of individuals from any unsettling criminal influences and guarantees the nonattendance of criminal inclinations which can undermine interior union and co-work presence of the country and its capacity to keep up its centre admirations and meet the honest to goodness yearning of the general population. (Dr. Idoko Cletus Usman, DasumaArida Mathew, September 2014). The straining condition of business alludes to uncertainty factors that influence the execution of a transaction yet finished which the business endeavour has next to zero direct control. In Nigeria, the elements go from burglary to composed furnished theft, capturing and interest for delivery, death, repeated attack and barring of business establishments, social foul play, and joblessness, the absence of access to occupation assets, increasing average cost for essential items, and bombings, pipelines pulverisation. Every one of these factors of violations and social diseases has made the Nigerian security condition to be intricate.

Notwithstanding the standard wrongdoings, the organised assaults from the Boko Haram group in the northern part of the nation, other than making life hopeless for Nigerians, has influenced such vast numbers of organisations working in that district. The bomb blasts started by these individuals have been on the expansion prompting massive death toll and property and a general air of dread and social pressure in the nation. Measurements have likewise demonstrated that in the year 2012, there is a vast decrease in peace as Nigeria dropped four spots to 146th out of 158 countries in the 2012 Worldwide Peace Positioning. Nigeria viewed as the minimum serene nation in West Africa (GPI, 2012). West Africa is among the most unsecured area on the planet, and Nigeria is the most unsecured nation in the locale as it has reliably positioned high among the countries in West Africa. Despite the expectations, Ghana, a neighbouring country to Nigeria has reliably placed low and taken as the most peaceful nation in the locale. The ramifications of the Nigeria instability circumstance for organisations business exercises cannot be emphasised. We battle that when there is the broad weakness, it could influence business investment, the whole business association or a few parts of its operations which incorporate generation, promoting, finance and human asset.

The ramifications of the difficult circumstance in Nigeria for business exercises can be viewed from two broad points of view, the viewpoint of potential business investment and the point of view of existing business endeavour. Potential Business Venture Difficulty disheartens investment as it makes venture ugly to businesspeople. This is because it expands the cost of working together either through direct loss of merchandise and properties or the cost of playing it safe against business dangers and vulnerability. These expenses negatively affect business improvement and advance. The thick bolt interfacing the uncertainty condition and business venture implies that instability has been a significant bar to business investment. World Bet on venture atmosphere in nine African nations in which it discovered that 29% of business administrators in Africa and 36% in Nigeria saw instability as a noteworthy imperative on investment. This circumstance has the harming outcome of offering sign to the global group that Nigeria isn’t a sheltered and secure place, and in that capacity not reasonable for venture and business exercises.

Outside firms and business visionaries would decline to invest, and this is especially imperative in perspective of the endeavours being made to make the coveted environment to draw in foreign direct investment. Along these lines, it is a substantial disincentive to business venture as it drives off potential investors. This is on account of such conditions or economies are viewed as high hazard zones because of the abnormal state of vulnerability about the security of investment and lives of the chiefs and their staff. There has been a decrease in foreign direct investment in Nigeria. Foreign direct investment (FDI) usually is investment focused on building new industrial facilities or putting resources into real generation exercises which create employment. Outside financial investors in the Nigerian economy are moving far from beginning new organisations or creation plants and are purchasing up offers of cited institutions. Figures from the 2010 Central Bank of Nigeria (CBN) yearly report demonstrate a precarious 78.1 per cent decrease in outside direct investment while likewise showing a critical 87.2 per cent expansion in portfolio venture into the Nigerian economy to exploit the misery in the Nigeria securities exchange.

Safety is the act of seeing the survival of all sundry in the society. It is the search to prevent, reduce, or resolve conflict in any community. General peace and security in any community associated with lack of violence, an absence of civil disorder and insurgency, however, this study attempts to show the relationship and effects of insecurity on investment in Nigeria, some security challenges in Nigeria concerning growth.

1.2 Statement of the Problem

The security challenges in Nigeria has have lot of effect on the Nigeria economy and foreign direct investment, the high level of terrorism and violence in Nigeria by the fundamentalist group (Boko Haram, bandits, militancy) has heightened fears among the populace and the international community and has eaten deep into our economy and as a matter of fact, the hostility has gone beyond religious or political coloration.

Several meetings, summit, conferences etc have being held in a bid to curb the menace in the country but all to no avail. Also apart from the fact that meetings have been held, the federal governments have spent millions of naira in making sure that security is brought back to the country but that has never looked worked. The president has told all security agencies to be at alert and to get their arsenals ready and to put more effort in the promotion of effective security in the country. Also the president in one of his speeches prompts all Nigerians to take security seriously because it is everybody’s business. But the question is will it ever stop? Can we say that the Boko Haram menace could be understood from the argument that Islam which give hope to the poor Muslims is being threatened out of extinction by Christianity and the Muslim youth who derive hope of a brighter future from the teaching of Islam are fighting to defend the survival of the hope of the hopeless Muslims, or do we see the insurgency from the prism of nationalism? In this light, this study will be guided by the following research question.

i. Is ideology and finding the fundamental factors that propelled the insurgent Sect in Nigeria?

ii. What is the relationship between insurgency and foreign direct investment in Nigeria using a theoretical approach?

iii. What is the causes and implications of insurgency on Nigerian political economy and business organizations in Nigerian business environment?

1.3 Aim and Objective of the Study

The main aim and objective of this study is to examine the political economy of security challenges in Nigeria; foreign direct investment drive. The specific objective is to:

1. Examine the relationship between insurgency and foreigndirect investment in Nigeria.

2. Takes an in-depth discussionon the causes and implications of insurgency on Nigerian political economy and businessorganizations in Nigerian business environment.

1.4 Research Hypothesis

The hypothesis is generated from the research questions and objective above:

Ho: There is no significance relationship between insurgency and foreign direct investment in Nigeria.

Hi: There is significance relationship between insurgency and foreign direct investment in Nigeria.

1.5 Significance of the study

The significance of this study is that it will act as a guide to the government in their quest to quell the problem of terrorism or insecurity in Nigeria as it affects the economy of the country. Also judging from the fact that terrorism is currently a prevailing cankerworm and it’s very spontaneous and topical, this study will help to proffer solutions.

More so, this work, theoretically will be useful to writers, scholars, journalists etc. in order to add to their existing knowledge what they already know about terrorism and Nigeria’s economy, particularly the Boko Haram activities.

1.6     Scope of the Study

The scope of this study is to examine the political economy of security challenges in Nigeria; foreign direct investment drive.

1.7     Limitations of the Study

This study is impaired by the challenge of few materials available for reference on the topic of security challenges in Nigeria. This has only been a new topic of discuss in the academic setting. Some information which would have been relevant for this research work was not disclosed by security agents who were interviewed.

1.8 Definition of Terms

Political Economy: Political economy is the study of production and trade and their relations with law, custom and government; and with the distribution of national income and wealth.

Security:Security is freedom from, or resilience against, potential harm (or other unwanted coercive change) caused by others. Beneficiaries (technically referents) of security may be of persons and social groups, objects and institutions, ecosystems or any other entity or phenomenon vulnerable to unwanted change.

Foreign Direct Investment:A foreign direct investment is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control.

Terrorism: this is an illegitimate means of attempting to effect political change by the indiscriminate use of violence. Also it is the use of violence to achieve political objectives.

Nationalist: A person who advocates that the interests of the nation or country are primary and deserving preference over other individual’s interests. A nationalist is concerned mainly with promoting the concept of the nation in its various forms that may include any or all among the economic, cultural aspect of the country.

Menace: menace means a possible danger, a threat, or an act of threatening. It also means something that threatens to cause evil, harm, injury etc. this also means the show of an intention to inflict evil, indication of a probable evil or catastrophe to come.

Insurgence: Armed uprising or rebellion against a government. The term has been used variously to describe revolutionary movements, civil wars, anti-colonial struggles and terrorist agitations, it is also seen as the state or attitude of being indulgent or tolerant.

Economy: This refers to the wealth and resources of a country or religion, especially in terms of the production and consumption of goods and service. It is also the state of a country or region in terms of the production and consumption of goods and services and the supply of money.

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