Climate change is increasing hunger, poverty, disease-burden, migration, conflict and insecurity in Nigeria. It is damaging infrastructure, changing Nigeria’s coastlines, fuelling desertification, producing water scarcity, facilitating erosion and resulting in the loss of revenue for states and the national government. The total economic cost of climate change to Nigeria was estimated at $100 billionby 2020 and is projected to rise to $460 billion by 2050. Climate change may also cause Nigeria to lose trillions of dollars in stranded assets.

With these far-reaching negative effects on Nigeria’s human and natural systems, climate change has the potential to jeopardise the country’s economic development and alter its geographical, social, and political trajectory for decades or centuries. Some of the repercussions of climate change on the nation may be irreversible. Therefore, it should be evident that climate change is not a marginal or peripheral issue that the government and the people of Nigeria can take lightly.

Even though climate change poses significant threats to Nigeria’s economic development, it also presents an opportunity to further diversify the economy, expand the country’s energy portfolio, address energy security concerns, and increase global economic competitiveness. To transform climate change from a significant threat into an opportunity requires deliberate planning supported by immediate, bold and courageous action.

There is evidence that successive Nigerian governments recognise the enormous threat of climate change and the necessity for action, as indicated by a plethora of policy declarations, documents, and a national climate change law. However, actual action is still behind schedule. The government has not yet established a clear roadmap for the effective and comprehensive implementation of key policies and commitments, and there are no clear budgetary provisions for their implementation.

Transitioning to a green economy is a complex endeavour that requires meticulous planning, stakeholder participation, and a dedication to sustainable development. Leveraging climate action to pursue economic development in Nigeria is not only a viable but essential strategy. Incorporating climate considerations into economic development strategies can result in more inclusive and sustainable growth.

Such a move can provide Nigeria with excellent opportunities to construct a climate-resilient economy that not only promotes growth and reduces poverty, but also creates good green jobs and contributes to the reduction of greenhouse gas emissions and environmental sustainability. By proactively addressing the issue of stranded assets, Nigeria will also be able to position itself for a more resilient and prosperous future.

The emphasis should be on finding methods to industrialise and transition without substantially increasing the country’s emission profile. To accomplish this, Nigeria will need to implement mitigation and adaptation strategies that considerably enhance its macroeconomic stability, economic transformation and job creation, while minimising the negative impacts of climate change on development.

The global transition from a high-carbon economy to a low-carbon economy is already well underway through a multitude of international and national initiatives many of which are led by high-polluting industrialised nations that are keen to transform their economies and position their countries as net beneficiaries of the new global green economy. These strategies and investments will inevitably alter the global political, economic and geopolitical landscape, producing winners and losers across the world.

Whether Nigeria will swim or sink in the face of climate change and the global green growth transition will depend on its willingness to take urgent action now and re-align its national development strategies towards a low-carbon economic future.

*Excerpted from the latest Agora Policy report titled “Climate Change and Socio-Economic Development in Nigeria,” authored by Professor Chukwumerije Okereke, Professor Emmanuel Oladipo, Ms. Ifeoma Malo and Dr. Fola Aina.

By Ifetayo Idowu | Corruption has for long been a pervasive issue in Nigeria. It has had devastating consequences for the country’s economy, security and social relations. Also, the scourge of corruption has reinforced negative patterns of poverty and inequality in both public and private sectors.

Over time, several measures have been implemented by different administrations to combat corruption in the country. While some of these measures have made some dent, most have not had the desired impact. The problem persists. Nigeria is still perceived as one of the most corrupt countries in the world, ranking 150 out of 180 countries in the 2022 Corruption Perception Index of Transparency International (TI).

Last week, Agora Policy released a report titled “Imperative of Strengthening Nigeria’s Transparency and Accountability Measures”ⁱ. Produced with the support of MacArthur Foundation, the report x-rays 16 anticorruption measures in the country and advocates for sustaining and strengthening Nigeria’s transparency and accountability measures. It concludes with this evocative line: “whether now or in the future, Nigeria needs more transparency and accountability, not less.”

This intervention builds on and fleshes out one of the recommendations of the timely report: the need to deploy insights from behavioural science to effectively tackle the values, attitudes and narratives that enable corruption in the country. In short, the need to nudge Nigerians away from the costly and destructive practice of corruption.

The Unbearable, Multidimensional Costs of Corruption

To begin with, we need to establish that the economic and social costs of corruption in Nigeria are extensive. According to PwCⁱⁱ, the cost of corruption in Nigeria is estimated to reach nearly $2,000 per person in 2023. The organisation also estimated that, if not properly dealt with, corruption could cost Nigeria up to 37% of GDP by 2030.

It was also reported that between 2009 and 2020ⁱⁱⁱ, Nigeria lost 619.7 million barrels of crude oil valued at N16.25 trillion to theft and sabotage, which are forms of corruption. In contrast, the combined allocation for healthcare and education was N6.79 trillion less than the amount lost to these forms of corruption for the same period.

The social cost of corruption can be seen in how corruption perpetuates inequalities and poverty^iv. It has a disproportionate impact on the poor and the most vulnerable members of society. It reduces the amount of money available for job creation, relief activities and government’s poverty alleviation programmes.

It also increases the cost of social services, including health and education, and reduces access of vulnerable members of society to these services. This reflects in unbuilt, poorly-built and poorly-equipped schools, ill-equipped and understaffed hospitals, and poorly-built roads which increase transaction costs and accidents and reduce human welfare. Corruption also creates a system where justice and safety are not prioritised leading to safety laws and due process being ignored and leading to unavoidable deaths.

Corruption has also led to a breakdown of social capital in Nigeria. Social capital allows a group of people to work together effectively to achieve a common purpose. Without it, society experiences a decline in social cohesion and an increase in crime, among many other things. This is bad for nation building.

In summary, corruption is not a cost-free or a victimless crime.

The Nudge Approach to Anticorruption

The gravity and the cost of corruption make it imperative for Nigeria to constantly look for more effective ways of taming the scourge. One relatively new approach that can be engaged in the fight against corruption in Nigeria is nudging, an approach popularised by Cass Sunstein, a Harvard University professor, and Richard Taler, a University of Chicago professor.

Nudging involves using insights from behavioural science to design and drive campaigns for changes in norms, values, attitudes and behaviours to achieve desirable outcomes. It can be an effective tool in the fight against corruption. Even though the act of nudging itself is not a new thing, using it as an anti-corruption tool is relatively new^v.

Nudging can be used as a tool to change the context in which decisions are made. It can be used to influence the way people act, without constraining their choices. In this way, it can be used as a supplementary tool in fighting corruption. Nudging is a subtle and non-coercive method that influences people’s behaviour in a positive way. It involves using indirect suggestions to influence people’s behaviour and decision making.^vi

Nudging can be used in many ways to fight corruption. One way nudging can be used in Nigeria is to fight prevalent mentality such as “public money is everybody’s money” which Nigerians use to justify taking and misallocating public money; “where you work is where you eat” which people use to justify treating their employers unjustly. These sayings help people reinforce bad behaviours. In the same way, anti-corruption slogans can be employed as a tool to help shape people’s opinions about corruption, sayings things such as “keep nothing under the table, except your shoes” or “Fight corruption. Bring progression” can be employed. The first expression reinforces the message that anything that cannot be done in everyone's view is corrupt and the other talks about the damaging effects of corruption. Nudging can be used to influence mindset.

Similarly, nudging can be used as a tool reminding people to act honestly. Like telling a child “thank you” for doing something they haven’t done as a reminder, people need to be reminded to act honestly. This can be done either directly by reminding people to do the right thing because their actions have consequences before meetings start, or by using more subtle means like making financial decisions during certain periods of prosperity, like after payday.

Directly reminding people of the consequences of their actions or inactions is another way of nudging. One way this can be done in Nigeria is by humanising corruption, drawing a direct line between a father’s poor level of education and his poverty or the connection between an amputee and poor state of infrastructure and not-upholding safety measures. Nudging can be used to promote more positive choices.

Nudging can also be used as a tool that incentivises the preferred behaviour. Public workers can be awarded certain benefits for being transparent. The Agora Policy report stated that in Nigeria’s history only eight public officials have publicly declared their assets. Even though this act promotes transparency, no applause or recognition was given to these individuals. There is nothing to distinguish them from the people who act otherwise. In using nudging as a tool to incentivise the preferred behaviour, wrong and bad behaviour must also be punished. This is because when people see their peers getting away with violations, they are likely to join the bandwagon. Nudging can be used as a tool that informs and empowers people.

In conclusion, nudging presents a promising approach to tackling corruption in Nigeria.  It offers a psychological approach in that it deals with the root and behavioural causes of corruption and promotes a culture of transparency and accountability. By complementing traditional anti-corruption measures with nudging, Nigeria can effectively reduce the costs of corruption on its development and on its citizens. This will ultimately lead to a more equitable and prosperous country.

*Ifetayo is a policy and data analyst at Agora Policy

Footnotes

[i]Agora Policy No.4 (2023) Imperative of Strengthening Nigeria's Transparency and Accountability Measures. Available at: https://agorapolicy.org/report/

[ii]PWC (2016) “Impact of Corruption on Nigeria's Economy.”  PricewaterhouseCoopers Limited. Available at: https://www.pwc.com/ng/en/publications/impact-of-corruption-on-nigerias-economy.html.

[iii]Aduloju, Bunmi (2022) “NEITI: Nigeria Lost N16.25trn to Oil Theft, Sabotage in 12 Years.” The Cable, December 15. Available at:https://www.thecable.ng/neiti-nigeria-lost-n16-25trn-to-oil-theft-sabotage-in-12-years

[iv]World Bank (no date) Combating Corruption, The World Bank. Available at: https://www.worldbank.org/en/topic/governance/brief/anti-corruption

[v]Slota, A. (2018) The subtle science of nudging anti-corruption, Palladium. Palladium. Available at: https://thepalladiumgroup.com/news/The-subtle-science-of-nudging-anti-corruption

[vi]Mullet, T. (2022) “What are the advantages and disadvantages of nudging?” Warwick Business School, 14 February. Available at: https://www.wbs.ac.uk/news/what-are-the-advantages-and-disadvantages-of-nudging/

By David Nwachukwu and Faith Adeniyi | Transparency and accountability are crucial for reducing opportunities for corruption in the public sector. This fact is not lost on various administrations in Nigeria, which have established various measures over the time to mitigate corruption and promote accountability and transparency. There has been a surge in the adoption and implementation of these sunshine measures since Nigeria returned to civil rule in 1999. But the result has been mixed. While some of these measures have been very successful, most have not made the expected impact. This forms the backdrop of the fourth policy report by Agora Policy, titled: ‘Imperative of Strengthening Nigeria’s Transparency and Accountability Measures’.

The report assessed 16 distinct transparency and accountability measures in the country within four clusters: Norms & Values, Public Financial Management, Open Disclosure, and Sanctions/Enforcement. It looks at the rationales, histories, challenges and records of these measures and makes recommendations for strengthening them. As the country gets ready for transition to a new administration, the report submits that “Nigeria needs more transparency and accountability, not less.”

Below are some of the key messages from the report:

Assets declared by public officials should be made public

The report contends that asset declaration by public officials is criticalto checkmating corruption in the public sector, if implemented effectively. The report claims that the potential of this measure is yet to be fully optimised largely due to lack of publication and verification of assets declared and limited capacity and resourcing of the Code of Conduct Bureau (CCB), the government agency charged with the implementation of the law. First, the calls for the amendment of Paragraph 3(c) of the Third Schedule of the 1999 Constitution of the Federal Republic of Nigeria. This provision empowers the CCB to make assets declared by public officials available to any citizen of Nigeria “only on terms and conditions as the National Assembly may prescribe”. According to the report, the refusal of the National Assembly to stipulate the condition for public disclosure has undermined the transparency and accountability utility of asset declaration, hence the recommendation for constitutional amendment.

The report also advocates for the verification of assets disclosed to CCB. It is believed that the disclosure and verification of the assets would prevent false declarations, deepen transparency and also increase trust in the government. However, at present, the CCB is undermined by limited budgetary allocations compared to other anticorruption agencies. This hampers the capacity of CCB and the Code of Conduct Tribunal (its sister agency) to adequately discharge their weighty responsibility of verifying assets declared by public servants across the three tiers of government and successfully prosecute those who err.

President Buhari should sign the new audit bill

The routine audit and legislative oversight of public accounts is a policy believed to regulate Government MDA’s expenditure and accounting to minimise incidences of corruption through internal and external audit processes overseen by the Office of the Auditor-General of the Federation (OAuGF). Despite the potential of this mechanism in promoting accountability and mitigating corruption in public service, many Ministries Departments and Agencies (MDAs) default in compliance, with the expected annual submission of their financial statements to the OAuGF and their counterparts in the states. The report states that without the power to sanction the Auditor-General is a ‘toothless bulldog’ and that Nigeria’s subsisting audit law is outmoded. Hence, the report recommends that President Muhammadu Buhari should sign the Federal Audit Service Bill into law before leaving office. It states: “the bill, which was passed by the National Assembly on 29 March 2023, repeals the Audit Ordinance of 1956. The bill strengthens the operations and independence of the Office of the Auditor General of the Federation (AuGF).”

Integrity checks needed on heads and staff of agencies with anticorruption mandates

Beyond corrupt practices found in various public offices, the report spotlights how the abuse of power by anticorruption agencies and public accounts committees have allowed corruption to thrive. In addition to bribe collection, “some civil servants have been reported to award multiple bids to contractors for some negotiated returns, while some even award contracts to their personal companies in violation of regulations against conflicts of interest.” All these acts are not in line with stipulated processes and should attract sanctions.

To address this gap, the report recommends integrity checks on the boards, leadership and staff of institutions with anti-corruption mandates and institute adequate safeguards on the exercise of oversight powers. The report states that, “these measures are needed to ensure that there is a symmetry between the mandates of these critical institutions and the values of those who work in and lead them, that there are measures for ‘watching the watchdogs’, and that the anti-corruption institutions are not undermined by the same ills that they were set up to tackle.”

Many MDAs don’t comply with government policies and without consequences

The report highlights how non-compliance across various MDAs has affected the successful implementation of anti-corruption measures. For instance, many MDAs default in compliance with the Freedom of Information (FOI) Act. Some MDAs also default in compliance with the expected annual submission of their audited financial statements to the OauGF. In 2020, the OAuGF reported that “65 MDAs had not submitted their financial statements for audit since January 12, 2017.” Similarly, not all public officials faithfully fill their assets declaration forms as required by law: on assumption of office, every four years, and when they exit. The report recommends strict enforcement of existing policies and adequate consequence management.

Need for a robust value/attitude re-orientation campaign

The report observes that most of the anticorruption measures are not delivering the desired impact because of a distorted and dysfunctional value system not just in the public service but also in the larger populace.  To address this gap, the report advocatesfor a national re-orientation programme to instill anti-corruption values. The report advises the Federal Government to “launch a comprehensive and well-thought-out national value reorientation programme that creatively seeks to change the dysfunctional values, attitudes, and narratives that wittingly and unwittingly enable public corruption. The impact of the current emphasis on systems and sanctions will be limited without changes in societal values.”

Investments in technology and capacity could be game-changers

The report considers technology the greatest enabler of transparency and accountability. It thus highlights the need for continuous investment in technology and training for anticorruption agencies. The report points out that, “technology can be leveraged to enhance transparency across the diverse Public Financial Management (PFM) and open disclosure clusters where e-payment and electronic collection and dissemination of information have become a huge issue of concern.” While advocating for the adoption of technology in other areas of the anticorruption work, the reports encourages government to stick to and improve existing technology platforms. The reports states: “Thus, rather than contemplate the idea of going back on technology-driven platforms such as GIFMIS, IPPIS and the rest, the focus should be on how to improve their deliveries and build capacity for more effective use to strengthen transparency and accountability.

In related vein, the report advocates for more investment in capacity building for the staff of anticorruption agencies. According to the report: “capacity building to bridge gaps in technical knowledge and skills will go a long way to enhance the effectiveness of the relevant personnel in these institutions and, ultimately, strengthen transparency and accountability.”

The Whistleblower and other policies need legal backing

Introduced in 2016, the whistleblowing policy is an accountability and transparency mechanism designed to encourage confidential and voluntary reporting of suspected corrupt practices. Since its introduction, the policy has recorded notable milestones. For instance, the Presidential Advisory Committee against Corruption (PACAC) reported that “N594.09 billion was recovered in three years between 2017 and 2020 through the implementation of the whistleblower policy.”

With notable results as such, the report recommends the need for legal backing in order to make the policy more effective and most importantly, ensure its sustainability beyond the current administration. Subsequently, the report also calls for the protection of whistleblowers and employees of the relevant investigative agencies given the accompanying risk arising from the absence of adequate protection.

Amidst the positives of the policy, the report also makes the case for some adjustments. According to the report, “.... whistleblowing must be reviewed in order to checkmate abuses, victimisation and false accusations.” This argument is not far-fetched given some of the perverse incentives that could come with whistleblowing, including the monetary reward for whistle-blowers.

The report also recommends legal backing for the Open Treasury Portal (OTP), an initiative which potential for checkmating corruption launched by this administration.

*Nwachukwu is communication officer while Adeniyi is programme officer at Agora Policy

Nigeria’s impressive array of transparency and accountability measures has not made the desired dent on governance and development in the country because of subsisting gaps in legislation, capacity, values and resourcing, says a new report by Agora Policy, an Abuja-based think tank.

By Douglas Okonko | The second issue of The Agora Policy Report, titled Understanding and Tackling Insecurity in Nigeria, was released on Monday, 7^th November 2022. The report dissects the types, manifestations and drivers of insecurity

By Ifetayo Idowu | The emergence of one or more forms of insecurity in nearly every region of Nigeria has pushed those regions to the frontlines of conflicts. Terrorism, herder-farmer conflicts, and ethnoreligious conflicts are all present in the North-Central and North-West regions of the country. In the North-East, Boko Haram and its affiliates are a constant thorn in the side. Militancy and economic sabotage are still present in the South-South, while ritual killings, cultism, and herder-farmer conflicts are prevalent in the South-West. In the South-East, the Eastern Security Network (ESN), the armed wing of the Indigenous People of Biafra (IPOB), continues to cause death and mayhem.

Agora Policy has just released its second and most recent report, focusing on widespread insecurity on the country. Titled "Understanding and Tackling Insecurity in Nigeria,” the report examines the history, types drivers and manifestations of insecurity in Nigeria, and provides recommendations for a systemic and sustainable solution.

Impact of the Economy on Insecurity

Examining the background of the country's most prominent security issues, the report highlights how poverty and unemployment create an environment conducive to the growth of insecurity. The report states that “high incidence of poverty and unemployment expands the pool of possible recruits for criminal activities.”

In Nigeria, 39.1% of the population lives below the international poverty line of $1.90 per person per day, and an additional 31.9% have consumption levels between $1.90 and $3.20, making them susceptible to poverty in the event of even the smallest of shocks. An earlier report on the economy published by Agora Policy reported that poverty is more prevalent in rural areas, with 52% of the rural population living in poverty and with people employed in the agrarian sector more susceptible to poverty than those employed in any other sector of the economy. Based on population projections for 2021¹, this equates to 49,947,644 rural dwellers living in poverty.

Unemployment rate is 33.3%; while youth unemployment is 42.49%. This figure shows that almost half of Nigeria’s most productive group is economically inactive. Unemployment causes large drops in household income. In some cases, unemployment is transitory but, for many, it is a persistent risk to economic security. Unfortunately, Nigeria’s high population growth rate increases poverty and decreases employment opportunities, which in turn increases poverty. These high numbers make people more susceptible to engage in criminal activities.

Furthermore, even though insecurity is one of the results of economic pressures among Nigerians, it has also become a threat to the well-being of the same citizens. In Nigeria, insecurity is both a cause and an effect of low economic development.

Impact of the Insecurity on the economy

On October 23rd, 2022 the United States issued a security alert citing “elevated risk of terror attacks’ in parts of the country, especially the FCT. Other western nations followed suit. This subsequently led to the precautionary and temporary closure of schools, recreation centers, restaurants and other businesses. This incident shows one of the direct connections between insecurity and economic activities. Insecurity reduces economic activity, reduces revenue and fuels poverty.

Food Inflation and Banditry

Food inflation in Nigeria keeps worsening as insecurity keeps farmers away from their farms. In September 2022, food inflation in the country rose to 23.34% on a year-on-year basis. The North-West and North-Central regions of the country are responsible for the bulk of Nigeria’s food production, and these places are heavily impacted by insecurity. The fear of being kidnapped stops farmers from going to their farms, distorting planting and harvesting cycles. In other areas, farmers are paying bandits to cultivate their farms, directly affecting the quantity of food they can produce. Others, after their labour have abandoned their harvests. In the same vein, terrorists and bandits are known to raid markets for food, animals and cash to feed themselves and finance their operations. According to the National President of the All Farmers’ Association of Nigeria, the country loses 50 per cent of its food production due to insecurity. A lot of Nigeria's food shortage is caused by insecurity, which in turn makes food inflation go up.

Food transportation from the North to the other parts of the country is also an issue as food transporters face the same security challenges. Travelling across the country by road is no longer a safe option and drivers and traders are in constant fear of being kidnapped.   The challenges leave farmers and their families vulnerable to poverty and hunger but this also has implications for food prices and cost of living across the country.

Economic Sabotage in the South East and South South

In the South-East, August marked exactly one year since the Eastern Security Network declared every Monday a stay-at-home holiday. The eastern part of the country, renowned for commerce, is greatly affected as no economic activity takes place on Mondays in the zone. Businesses are crumbling under the weight of this order as even customers travel to safer areas to trade. Recently, Governor Chukwuma Soludo, an economics professor and former CBN governor, stated that his state, Anambra, loses N19.6 billion every Monday due to the sit-at-home order.

Militancy, manifested in oil-theft, pipeline vandalism, piracy, illegal bunkering, kidnapping of expatriates in the Niger-Delta region has a far-reaching impact on the national economy. The Agora Policy report states;

“ apart from being largely responsible for the insecurity in the region and Nigeria's current acute energy supply crisis, militancy discourages foreign investment in new power generation plants in the Niger Delta region”.

The Nigeria Extractive Industries Transparency Initiative (NEITI), also reported that about $42 billion was lost to oil theft and sabotage over a ten-year period. Nigeria is the only oil-producing country not reaping benefits from the current historically high oil prices. Nigeria cannot even meet its reduced OPEC quota partly because of high level of oil theft.

Rural areas across the country are now characterised by ungoverned spaces and economic activities are restricted. Insecurity affects every sector of the economy either directly or indirectly, it leads to forced migration, displacement, food insecurity, cattle rustling, destruction of poverty and health challenges. It affects people's access to resources, incomes and freedom. Insecurity has a negative impact on economic growth by drying up investments, increasing unemployment, and decreasing government revenue.

In 2020, the Global Terrorism Index reported that economic cost of terrorism to Nigeria was 2.4% of the country’s GDP. The report also states that Nigeria incurred the largest economic impact of terrorism in the world from 2007-2019 at $142 billion.² In 2021, Town Talk Solutions reported that projects worth N12 trillion were abandoned across the country due to insecurity. These figures have implications for job creation, government allocations and investments, purchasing power and confidence of citizens, and the country’s fight against poverty.

Recommendations in addressing Nigeria’s Security Challenges

According to the Agora Policy report on insecurity, "to stand a fighting chance in overcoming widespread and growing insecurity within its borders, the country [Nigeria] needs to adopt a more holistic approach that effectively combines tackling security threats with addressing the root causes of conflicts and agitation."  Economic pressures, which fuel insecurity in Nigeria and are a challenge in and of themselves, need attention from the government. If not addressed, unemployment, particularly high youth unemployment, could exacerbate societal and security issues. In a previous report titled ``Options for Revamping the Nigerian Economy" Agora Policy made the following recommendations for improving the welfare of Nigerian citizens to reduce the economic burdens they bear:

• Prioritizing and Fine-tuning job creation strategies
• Deepening investment in critical infrastructure
• Scaling-up investment in education
• Increasing coordination across tiers of government on poverty alleviation.

Due to the complexity of the problems confronting Nigeria, the government cannot afford to address the problems in isolation. The relationship between insecurity and economic pressures makes it difficult to effectively address one issue without addressing the other. The nature of both challenges is also such they cannot not be deferred. They have to be tackled quickly and simultaneously.

*Idowu is Data/Policy Analyst at Agora Policy

Footnotes

^[1]https://data.worldbank.org/indicator/SP.RUR.TOTL?locations=NG

^[2] https://visionofhumanity.org/wp-content/uploads/2020/11/GTI-2020-web-1.pdf

By David Nwachukwu | Nigeria is an eerie example of the relationship between climate change and insecurity. Nigeria’s location in both the Sahel region of Africa and along the coastal line of West Africa increasingly makes the country vulnerable to climate shocks from the north and the south. The Lake Chad basin, a major lifeline for millions of people living in the Sahel, has notably shrunk by 90 percent since the 1960s.Drought and desertification have increased in recent years, negatively impacting the arid northern states. Coastal erosion and flooding are now frequently experienced in Lagos, Kogi, Benue and other states, due to high precipitation, among other reasons.

These climate shocks negatively impact not just life and livelihoods but also contribute to struggles and conflicts over arable land and water. The latest report by Agora Policy, ‘Understanding and Tackling Insecurity in Nigeria,’ rightly identifies climate change as a much-overlooked driver of conflict in Africa’s most populous nation.

As world leaders converge in Egypt this month for the 27^th United Nations Climate Change Conference (COP27), climate activists can expect a plethora of pledges from each country aimed at tackling the reduction of carbon emissions. For Nigeria to reduce its vulnerability to natural disasters and climate change, government agencies must accelerate their plans for adaptation and mitigation by implementing holistic solutions to climate-related security issues. Doing this well will also assist Nigeria in tackling its security challenges.

It is estimated that in the past 15 years alone, the number of deaths in the Sahel has increased by more than a thousand percent as a result of the competition for the region's dwindling supplies of water and food. Insurgent groups like Boko Haram seek to take advantage of the fact that 30 million people in Nigeria, Chad, Niger, and Cameroon are all vying for the same limited water resources. Recent ecological threat reports point out how terror groups in charge of water supply can charge an already vulnerable population a fee to use limited supply, using it as leverage to conscript them, or even use their need for water as an excuse to forcibly enlist members.

Young girls and women are disproportionately affected by this while carrying out domestic duties, taking long walks in search of water– often facing the great risk of abduction and sexual assault. Nigeria's security situation is exacerbated by its porous borders, which allow for unchecked/unsupervised entry into the country, making people in Northern Nigerian communities even more susceptible to attacks.

The harmful effects of climate change pose immense risks to the lives, livelihoods and well-being of communities across West Africa. Despite making the least contributions to the global climate crisis– emitting just 0.51% of total greenhouse gas emissions (GHG) the region remains one of the biggest victims of its ghastly impacts, bearing an unfair burden of the global north’s mistakes.

Socioeconomic Impacts of Climate Insecurity

The massive loss of livelihoods to climate disasters puts even greater pressure on the national economy. Two-thirds of the global poor are reported to be from Sub-Saharan Africa, with Nigeria recording the highest number of poor people living within the region. The World Bank has recently estimated the number of citizens living in poverty will reach 95.1 million by the end of 2022. Climate-related shocks such as the country’s recent flooding crisis have displaced over two million citizens to date, damaging over a million acres of the nation’s farmlands.

By proxy, the impact of these catastrophic floods further escalates an already existing food crisis, as 2022 marks the second consecutive year when Nigeria ranks 103^rd on the Global Hunger Index (GHI). Before experiencing the worst deluge in over a decade, rain-fed farming patterns were already changing due to unpredictable weather conditions– making temperatures rise and fall drastically during dry seasons and pushing farm households to adapt their livelihoods to new conditions.

With pastoral communities losing land and water resources to environmental decay, many are forced to become climate migrants in search of sustenance, where they are pushed south towards central farmlands. This shift creates a scuffle for limited resources leading to conflict. The long-standing conflict between farmers and herdsmen has escalated dramatically in the Middle Belt, a central region in Nigeria, as herdsmen have been forced to migrate south from their traditional grazing lands as a result of drought. This pattern is reflected in different parts of the country, including the North West, South West and the South East.

The recent report on insecurity by Agora Policy points out how clashes between farmers and herders over land have spurred the formation of ethnic militias, vigilante raids, and extrajudicial killings across Adamawa, Benue, Taraba, Plateau, Kaduna and other states. According to the report, land available for open grazing in Nigeria's Middle Belt declined by 38 per cent between 1975 and 2013, while the area dedicated to farming nearly trebled.

Elsewhere, climate migration significantly impacts security in the country’s major urban centres. The massive influx of displaced persons presents a problem in addressing issues of housing, employment and increased pollution. In the absence of available jobs and access to reasonable living conditions, displaced persons often turn to crime, illicit drug use and other scrupulous activities. Those living in peri-urban communities face the threat of being attacked by a vulnerable population that yields to the indoctrination of terrorist/militant groups.

Need for A Multidimensional Nature-Based Approach

It is advisable for policymakers to embrace a multidimensional approach to tackling this crisis. Going beyond the policies for sustainable development within Nigeria’s recently launched 2021 Climate Act, there is also a need for solutions tailored to the issues plaguing hotspots of conflict. The United Nations Environment Programme (UNEP) recommends that countries should enhance their preparedness for identifying, preventing and responding to climate-related security risks.

The report by Agora Policy has a number of recommendations along this line. One of these is a thorough review of Nigeria’s Land Use Act (1978). Review of this law is critical to the resolution of ongoing herder-farmer conflicts that hold resources ransom. Another recommendation is that government-proposed plans such as The National Livestock Transformation Plan (NLTP) and the National Pasture Development Programme (NAPDEP) should be much more transparent and inclusive to better address the concerns and needs of other citizens affected by these issues.

Additionally, enhancing the role of traditional justice mechanisms can also play a great role in managing the agitations brought by land disputes and communal conflicts, which are direct results of the degradation in Northern states brought on by climate change. There are also prospects for the Nigerian economy through climate financing, which would help the country’s mitigation and adaptation efforts in vulnerable sectors like agriculture and the power sector. Given the varied drivers and manifestations of insecurity identified in the report, it is important for policymakers to address root causes like climate change through holistic approaches.

*Nwachukwu is a Communication Officer at Agora Policy 

By Mohammed Shuaibu | Globally, international trade and investment flows are regarded as strong enablers of sustained inclusive growth and development. Countries with more liberal trade and investment policies tend to grow faster, innovate more, produce more, have higher incomes, and create more opportunities. Although globalisation has ushered in an era of economic prosperity around the world, some developing economies like Nigeria have not taken full advantage of the opportunities created.

Higher trade openness could help stimulate industrialisation and economic diversity. However, Nigeria’s trade history is skewed towards a restrictive trade policy stance. This stance has been primarily motivated by the need to protect some sectors, increase domestic production, ensure security (preventing the smuggling of arms and ammunition), and attain self-sufficiency in food production. The government has deployed various tariff and non-tariff barriers such as import bans and other economic policies such as multiple exchange rate windows, foreign exchange restrictions, and border closure that have significantly disrupted trade flows. These policies are the result of the wariness of trade liberalisation by some critical stakeholders whose scepticism derives from concerns about unfair competition that could stifle domestic companies. Trade as a share of GDP in Nigeria declined from 43% in 2010 to 34% in 2019 making it one of the lowest among peer countries.

A major characteristic of Nigeria’s trade performance over the last decade is persistent deficits. Trade balance moved from a surplus of N2.14 trillion in 2011 to deficits of N4.51 trillion in 2015 and N2.61trillion in 2016, largely due to the oil shock and weak foreign exchange management that led to a recession (Figure1). Despite modest improvements in the trade deficit in 2017 and 2018, it increased to N12.25 trillion in 2020, and N6.31 trillion in 2021. While the performance of total trade was largely stagnant between 2011 (N29.38 trillion)and 2017 (N31.15 trillion), it increased to N52.4 trillion in 2019, and N42.6 trillion in 2020 followed by a rise to N48.36 trillion in 2021 (Figure 1). The growth of exports and imports has been quite volatile in the last decade, with exports largely driven by global oil market conditions and imports constrained by a poor exchange rate management strategy and a restrictive trade policy environment.

Fig 1: Trade volatility is driven by oil shocks

Source: CBN BOP Statistics

The last few years have witnessed a significant resurgence of protection with an escalation of trade barriers. These include higher tariffs, levies, and import bans on some commodities that can be produced domestically such as rice, sugar, and cassava. These trade policy distortions combined with recent global developments such as the slow recovery from the COVID-19 pandemic and the Russia-Ukraine crisis continue to amplify risks.

Furthermore, the non-oil sectors that are crucial for Nigeria’s diversification with potential for job creation have remained largely unexplored due to supply-side constraints that have been worsened by an unfavourable trade policy environment. The agriculture and manufacturing sectors, for example, have not been optimally harnessed especially with the dominance of the oil sector which has further dampened prospects and crowded out non-oil sectors (See Fig 3). The low value-added of these sectors has contributed to the country’s vulnerability to oil price shocks and consequently, foreign exchange shortages.

Fig2: Low trade openness in Nigeria relative to peer countries

Source: World Bank, World Development Indicators online
Note: Endpoint (2020) for Nigeria based on 2019 value

Oil sector dominance of Nigeria’s trade over the last five decades has translated to its very low economic complexity relative to peer countries (Figure 4). The economic complexity index gauges the state of an economy’s productive knowledge and is improved by increasing the number and complexity of the products they successfully export.¹ Therefore, a robust trade policy and investment environment that promotes export diversity and sophistication could help address these gaps, create jobs, and inclusively transform the economy. Yet, the trade policy environment is dominated by restrictive policies which do not bode well for export diversification, capital inflows, and inclusive development. Trade supports economic growth through investment, competitiveness and technology transfer channels by creating jobs, improving domestic value-added and reducing domestic prices.

Fig 3: Oil Sector dominance in trade

Restrictive trade policies inhibit investment inflows and their positive effect on the economy.² This is because trade barriers could encourage market power (monopoly) which is associated with inefficiency, higher prices, technology transfer and knowledge spill overs required to spur inclusive development. The investment climate in Nigeria is largely liberal, with 100% foreign ownership allowed in all sectors except the oil and gas sector. Investments in this sector are limited to joint ventures or production-sharing arrangements, with a minimum ownership structure of 55% for the government. Foreign investors must be registered as limited liability companies. Two recent important legislations are expected to improve the business and investment environment. The first is the Finance Act 2019 which provides tax incentives for businesses, and the second is the Companies and Allied Matters Act (CAMA) 2020 which simplifies and provides additional clarity for setting up businesses in the country especially micro, small, and medium small-scale enterprises. However, structural challenges, macroeconomic policy instability, and insecurity have, interalia, constrained investment inflows to Nigeria.

Fig 4: Economic complexity in Nigeria is very low relative to peer countries³

A comprehensive long-term trade policy agenda can help drive sustainable growth. This will require robust monitoring and evaluation systems to gauge the implementation of regional and multilateral trade initiatives such as the Africa Continental Free Trade Area Agreement (AfCFTA). Nigeria is currently participating in the AfCFTA negotiations and therefore, the trade policy discourse, especially around rules of origin, services trade, and intellectual property amongst other outstanding issues is critical. At the same time, reforming the tariff regime and service restrictions would help enhance competitiveness. This would entail simplification of import duties and gradual liberalisation of the service sector given its potential to create jobs and stimulate the transfer of knowledge which can drive non-oil sector growth.

Furthermore, distortionary non-tariff measures need to be urgently revisited and phased out completely. These include: (i) the foreign exchange restrictions on 42 products by the CBN; (ii) a review of the import prohibition and absolute import prohibition lists and perhaps replacing these trade policy tools with tariff duties or import quotas; (iii) change in government policy on border closure from partial reopening to the full reopening of closed land borders.

Modernisation of ports and custom infrastructure is critical for a successful trade and investment reform. Despite modest improvement in port and customs operations, there is still a lot more that can be done to enhance efficiency and optimal service delivery. Urgently addressing trade facilitation constraints ranging from cumbersome customs procedures to congested ports are crucial for the success of trade reforms. This would require standardisation of procedures, strengthening the e-governance portal towards paperless transactions, and establishing a functional grievance and redress mechanism for stakeholders. This means that bold reforms are required by the Nigeria Customs Service (NCS) such as the implementation of the e-Customs modernisation plan and the National Single Window (NSW) platform that can improve trade facilitation. Also, critical investments through public-private partnerships would be required to help address port congestions and delays.

Reducing oil sector dominance in the economy and building up the sector’s value chain would help drive economic diversity while counter-productive waivers and informal leakages that reduce public and private investment in export-oriented sectors need to be revised. This entails nipping supply-side constraints in the bud to shift from oil to high-value-added agriculture and manufactured products. This could be achieved by creating an enabling business environment devoid of contemporaneous discretionary measures that inhibit trade flows such as border closure, foreign exchange restrictions, and import bans.

Trade and investment flows could play an important role in revamping the Nigerian economy. However, their potency will depend on the right complementarity of macroeconomic policies and structural reforms that can support trade and investment. Realizing the need to develop a medium to a long-term trade policy plan that prioritizes diversification is critical. Recalibrating the trade policy thrust by shifting from distortionary non-tariff to tariff measures could also help while efforts to accelerate port and custom reforms are required. The institutional path used to implement the right mix of complementary reforms could help Nigeria maximize the gains from trade and investment. This should be predicated on good governance in terms of efficiency, sustainability and equity.

*Dr. Shuaibu is a Senior Lecturer in Economics at the University of Abuja. He is one of the authors of Agora Policy’s report on “Options for Revamping Nigeria’s Economy.”

Footnotes

[1]https://atlas.cid.harvard.edu/rankings

[2]https://atlas.cid.harvard.edu/rankings

[3]https://atlas.cid.harvard.edu/rankings

By Babajide Fowowe | Federal Government’s total debt stock at the end of the second quarter of 2022 was N35.672 trillion. This comprised N14.723 trillion in external debt and N20.948 trillion in domestic debt.