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Terrorism – Whirlwind Effects Of Terrorism On The Nigerian Economy

Terrorism

13 December 2015. Ifeanyi Ugbonnaya (not his real name) sits on a bus counting his losses as a subtle harmattan wind twirls a piece of paper in rising spirals. He watches the paper rise higher and higher then flutter off into the distance. Ifeanyi arches his neck to see if he can catch a glimpse of the paper and winces as the sharp pain returns to his neck.  He curses under his breath and adjusts to make himself more comfortable. Why did he even want to look at the blasted paper?

The poet in Ifeanyi thought it was because he felt like he had been plucked up by a whirlwind and had been flung far away from all that he knew – he had traded in Borno all his life; he had gone home to Kano every weekend because the better schools were there. Then one explosion after another, he had watched this faceless group create turmoil, chaos, fear and it was that bit that had made people to cave in; they would leave and they would not come back! The thoughts had been clear as he watched the smoldering ashes after his stalls had been lost to the explosion – the wooden beams indistinguishable from the ashes of  fabric. Ten years of labour gone in a single explosion.

He raised his sleeves to wipe his face. They had said to be a man… Whatever that meant… He was angry… He wanted to scream, to get the validation that nothing about this scenario was normal, but he just sat there with the understanding that nothing can be the way it used to be. Maybe ‘his brothers’ were right – it was time to reclaim the East!

Terrorism And Business: The Grim Reality

A limited survey in November 2015 touted the figure, N256 bn, as the economic loss due to terrorism. I say limited because it took into cognisance only actual goods damaged in addition to some cost of manpower calculated to the barest minimum potential. In my books, the cost of terrorism on business is one that we have no business ostriching, but that’s what we do is it not? We, more than any other country, bury our heads in the sand and hope that when we emerge our bodies will be unaffected and the storm would have passed. Keep hoping because when it comes to terrorism, it’s raining cats and dogs, the roofs are leaking and somehow all the umbrellas have been spirited away. It will take a village to keep the roof able to keep out water.

But how does terrorism affect you, especially when you are so far from the north, and how much is it costing your business? Let’s start by thinking of terrorism as what it seeks to create, i.e. fear or the illusion of fear, leading to a sense of insecurity with a view to crippling the security system of a nation. To adequately understand what terrorism does to a country’s economy, we must examine it from the concepts of fear and tension. Let’s look at 3 key ways terrorist activities could cripple a fledgling economy using effects and affected industries.

Immediate Effect Of Terrorism: Hindered Movement

It’s 11:25 pm and you are hungry. You figure it’ll be great to get some suya, so you grab the car keys. Just then gunshots ring out and, as much as they sound like they’re coming from far away (possibly away from the suya seller), you abandon the car keys and opt for garri and groundnuts instead.

Those gunshots, whatever they were, have not only affected the sale of suya (or anything else in the vicinity), they affected your willingness to transport yourself and chances are you won’t be bothered to buy suya at night for a while!

Take this analogy and place it on a larger scale. Due to the high risk (to life) factor that goes hand in hand with terrorism, the will to travel is affected inversely.  This effect is not limited to inter-state travels; it also affects potential flights from other countries into ours. (Well, the foreign media alone can be counted upon to exaggerate the negatives.)

Sector Affected: Transportation

From an article on a THISDAY newspaper edition about the effects of Boko Haram in the North, a writer interviewed drivers and passengers at a local motor park. The summary of it all brought to bare the fact that even getting transportation was rare enough as some drivers and vehicle owners had quit altogether. Those who remained had reduced the number of trips a week from an average of 5 to one.

This unavailability of transportation translates to a loss both ways. For drivers, it means the doubling of the price of one trip to at least make some sort of gain, not counting the security risk involved. This does not compare to what would have been made if the number of trips had not been cut short. For the passengers, a price hike of this proportion meant an increase in the cost of doing business not counting the toll the lack of consistency would take on their business.

Commuters with business to do outside the North would have to wait on the transporters’ now unpredictable schedule to run his business. He would have to depend solely on the loyalty and patience of his customers. This kind of loss cannot be computed.

The cost to the transportation sector itself must also be looked at in broader perspective. For the past 3 years, established road transporters like Cross Country and others have recorded increasing loss on their Northern operations. In fact, very few of them still transport to the affected northern states; they have to merge passengers and do multiple drop offs within states. They also carry extra security details with them. One can only imagine what this does for the wear and tear of the vehicle, the increase in drivers pay and the added cost of security as well as the increase in insurance coverage premium for each passenger. With this heightened cost of doing business for road transporters, it’s no wonder that most have stopped venturing beyond the capitals of the affected states.

The same pattern can be observed in air travel as well as in potential infrastructural development. The time of completion for monorail projects, highway repairs, state road projects etc. becomes more in these situations. In fact, on air travel, the impact of terrorism is felt nationwide. The heightened security checks and measures often translate to delayed flights. How does one begin to quantify the amount of missed opportunities, lost transactions, etc. that have arisen as a result?

More Sectors Affected

The effect on the transportation industry and what it contributes to the economy naturally spirals into other sectors like agriculture, commerce (import and export) as well as hospitality and tourism.

Let’s examine this index in everyday market activities. Due to terrorist activities (whether it’s Boko Haram in the north, cattle rustlers in the Plateau/Benue region, militants in the Niger Delta and now IPOB in the east), cultivating and growing food items is risky in itself and so is transporting it. The high risk of transporting fish, oil, cattle and even already processed food translates to escalating prices that do not come with an increased earning power. People tend to then opt for imported canned products which sell at a lower price and will in most cases yield more. This in turn translates to higher import and limited export; definitely not good for a growing society.

The fallout of a decline in the transportation sector affects hospitality and tourism. Jindu Ofobuisikpe is the Manager of Dune Hills Hotels and Restaurants in Maiduguri. According to Jindu, the hotel had been a centre of activity before the attacks began. “People would come and book the place for conferences, weddings, and parties. We also had a viewing centre at the back…because of high demand, the bar was always full and we had a lot of staff. But since the attacks began, nothing has been happening. People don’t want to draw attention to themselves so they stay at home. Business is very slow.”

Another hotel worker pointed out that traders and businessmen who usually would sleep over in the town, now preferred to go back to Abuja once business was done.

Scenarios like these are commonplace in the regions most affected by attacks. As a result of their frequency, large businesses in the north have had to cut back on staff strength or even shut down. Perhaps the most striking example of what terrorism can do to a thriving tourism culture is the cancellation of the Kano Durbar festival in 2012. Cancellations like these translate to loss of influx into the country. Local arts and crafts are left unsold, tourist destinations lose out on human traffic, and food vendors and photo booths suffer.

This of course leads to inevitable decline in sales at wholesale points in big cities like Lagos and Port Harcourt.  In a wholesale store in Idumota Lagos, a cross section of traders in textile and African décor lamented over the loss of customers from both the north and hotels in Lagos. According to one of them, many hoteliers no longer see the point of upgrading their interior because they no longer attract the high level of traffic they used to.

Migrating Businesses And Withdrawn Investments

I once got into a debate of sorts with a friend of mine who felt that the foreign media was being unfair in their coverage of the terrorist attacks in the north. Not only were they relentless in exaggeration, they were hardly ever specific about region, often quickly glossing over the specific geography while spotlighting the country as a whole.

What this kind of coverage does is to create fear in the minds of possible investors while causing already established ones to migrate to what is deemed safer clime.  My argument, however, laid in the fact that it wasn’t the place of foreign media to tell our own stories or push our own agendas; it was our place to not only tell our own stories but to frame our own narrative.

According to Campbell and Bunche, terrorism thrives when the continuous narrative favours the notion that “government is not on the side of the people; and that their poverty is a result of government neglect, corruption, and abuse”.  When this happens, insurgent groups hijack the situation and begin to spread like a cancer. Towards the very end of 2015, insurgency had reached its peak in the north, but was very quickly rearing its head in the east. The longer one insurgent group remains in media reportage, the more likely it is for another to figure out that fear and mistrust are the best ways to accomplish its agenda.

Media reportage that favours the negatives increases the cost of insurance premiums while reducing the likelihood of a payout in the event of an incident. As noted previously, when the cost of doing business gets too exorbitant, the logical solution is to seek a clime where business does not cost as much. The down side to this is that products that were ordinarily made here and sold at low rates become imported products and are sold at much higher rates.  Cost of living for citizens is driven up.

Every time a terrorist sect attacks, they focus on the things that cause the economy to thrive – schools, markets, motor parks and places of worship. This cripples education, commerce, transport and plants the division and mistrust that transforms the country into a volatile environment.

Find out the economic impact of terrorism here.

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