The Nigerian investment promotion commission (NIPC) has revealed that the value of investment announcements in the first three months of 2022 was $8.41 billion. This is a 69 percent or $2.58 billion lower than what was announced in the first quarter of 2021.
The rising effects of insecurity in Nigeria has also affected the ease of doing business in the country, as a 2019 world bank annual ratings on the ease of doing business ranked Nigeria 131 among 190 countries.
The challenge of insecurity keeps getting worse each passing day, which has no doubt constituted a threat to lives in the country. Such challenge has hindered business activities and has also discouraged local and foreign investors from investing in the country which has stifled and retarded the economic development of Nigeria’s economy.
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A world bank report suggested that many Nigerians had fallen below the poverty line adding that the effect of the insecurity challenges took a toll on the country’s economy. The insecurity crisis greatly affected the cost of production which disrupted companies from planning for the future.
Such a security challenge has led to the emigration of companies and the shutting down of local manufacturing companies. This will no doubt pose a very big challenge to Nigeria’s economy because when companies leave the country, production is also taken away which will negatively affect the country’s GDP.
Domestic investment has also been affected, for example in the agricultural sector, farmers cannot cultivate on farmlands for fear of being killed which has disrupted agricultural activities leading to the reduction in the production output that is already harming the country’s economy as well as threatening food security.
In oil-producing states, the insecurity challenge has led to the exit of some oil companies. Oil theft, pipe vandalism, and illegal refinery has hindered Nigeria from contributing its quota to the Organization of Petroleum Exporting Countries (OPEC).
The insecurity challenge has also given a negative perception of the country to foreigners which have seen investors lose interest in wanting to do business in Nigeria as the risk involved is so enormous. The disheartening thing about insecurity is that it has a ripple effect on almost every sector in the country.
It has no doubt affected the creation of jobs and the generation of tax revenue. Unemployment rate has increased because some of these companies that left the country, had some Nigerian citizens who were working for them, and now due to their departure, these individuals are left jobless.
In the capital market, insecure investments with foreign investors pulled out about N1.64 trillion from the market in three years. There has been a huge outflow of capital that has led to concerns about their impact on the Nigerian economy.
Analysts have predicted that the precarious state of the stock market could worsen if the factors impeding the nation’s economic growth are not tackled immediately. It’s high time the government tackles the insecurity crisis that is ravaging the whole country, which is already affecting the country’s economy as well as preventing foreign and local investors from investing.
Unfortunately, till date, there has been no visible measures taken or put in place to abate the insecurity challenge across the four corners of Nigeria. For as long as the prevailing insecure environment subsists, the country will continue to reap its unpleasant consequences.