National security and economic stability in Nigeria

Abstract

Widespread insecurity has consistently threatened Nigeria's economic stability, with gains in macroeconomic reform undermined over the past decade by the intersection of violent conflict and precarious fiscal conditions. Nigeria currently ranks as the fifth most conflict-affected country globally, confronting simultaneous insurgency in the Northeast, banditry in the Northwest, farmer-herder conflicts in the Middle Belt, separatist militancy in the Southeast, and oil theft in the Niger Delta. This paper examines how insecurity affects Nigeria's economic stability through fiscal performance, agricultural productivity, investment climate, and macro-financial stability, while proposing evidence-based policy options for integrating security sector effectiveness with economic policy. Drawing on a systematic review of secondary data from government budgets, and international database, the paper synthesizes quantitative evidence on the fiscal, sectoral, and macroeconomic costs of insecurity, anchored in established theoretical frameworks. Consolidated security spending reached N17.36 trillion between 2021 and 2025, yet fatalities rose from approximately 10,000 in 2020 to 11,968 in 2025. Oil theft and vandalism cost the government $3.3 billion between 2023 and 2024, reducing production by 27.4% over a decade. Agricultural productivity in conflict areas declined by 20-30%, while over 33 million Nigerians were projected to face crisis-level food insecurity by mid-2025. Insecurity was identified as a key downside risk to growth in the country. Nigeria cannot consolidate macroeconomic reform gains without a reliable security dividend rooted in robust institutions. Medium-term priorities must integrate outcome-based security budgeting, sector-specific security architectures, and conflict-sensitive macroeconomic programming to ensure sustainable growth and national resilience.

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