THE ECONOMIES OF PEACE: ITS IMPLICATIONS ON NIGERIA’S ECONOMY

Misbau S. Abolarin1, Israel B. Adegboye2 and Zainab Hassan Salawu3

1
Department of Liberal Studies, Kwara State Polytechnic, Ilorin.
E-mail: olowoghana@gmail.com, Tel: +2348034814414
2
Department of Economics, Kwara State University, Malete.
Email: adegboyeisrael@gmail.com, Tel: +2348062075684
3
Centre for International Education, University of Ilorin, Nigeria.

Abstract
One of the major challenges Nigeria face in developing policies aimed at increasing peace is the
difficulty of being able to accurately measure the benefits that result from peaceful and secured
economy. In recent time, economic impact of violence in Nigeria is alarming, due to increase in
cost of conflict and internal security spending. The presence of social justice and the conditions
that eliminate the cause of violence as anchored in 16 goals of SDGs promote economic of peace
and secured business environment. The objective of this study is to investigate the affecting
factors of peaceful economy and its implications on Nigerians well-being. Deck research method
was adopted to review relevant literatures in the study. Descriptive analysis of statistical data
available shows the huge weight of national budgetary allocation to security. Despite the
humongous budgetary provision, Nigeria is yet to achieve economies of peace. Therefore, the
study recommended social inclusiveness of all stakeholders; good governance and
accountability of available fund to national security should be transparent.
Key Words: Economic of peace, Violence, SDGs, Nigerian’s economy.

Introduction

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The security challenges have threatened both economic prosperity and peaceful coexistence of

Nigerians. The Nigeria’s government in its quests for economic of peace has experienced and

embarked upon a number of security strategies and huge budgetary allocations are been

expended. Achieving peace has thus remained a challenging task for past and successive

government due to the enormous financial and material resources channeled to regions faced

with security trials in Nigeria (Edesiri and Egbunike, 2016). Strategies are being devised by the

multinational companies and the governments for the enthronement of peace in Nigeria.

Multinational companies are spending so much money to hire security agents to protect their

facilities and personnel from militant attacks and other miscreant. The government on the other

hand is spending huge amount of money to maintain peace-keeping forces in the region. No

country can develop or grow economically without peaceful coexistence among its population

and within its borders (Kimanuka, 2018). According to Bright (2018) the federal government

through its annual budgets, continue to vote huge allocation to the recurrent component of

internal security, military personnel and apparatus have been asked to relocate their bases to the

troubled areas to quell crises, and some States have signed into law the Anti-Kidnapping Act

while the National assembly passed the Anti- Terrorism Act in 2011. Despite these measures,

economic indices have not improved and the level of insecurity in the country is still high.

The Sustainable Development Goal 16 is targeted at promoting peaceful and inclusive societies

for sustainable development, provide access to justice for all and build effective, accountable and

inclusive institutions at all levels. Peace economics in this regard concerns the economic study

and design of political, economic, and cultural institutions, their interrelations, and their policies

to prevent, mitigate, or resolve any type of latent or actual destructive conflict within and

between societies. Peace economics is not primarily about the prevention of (state or communal)

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failure, but about the creation of stable structures of peace. It is about invulnerability,

irreversibility and about the foolproof, unconditional viability of peaceful social systems (Brauer

and Caruso, 2013). Hence, the presence of social justice and the conditions that eliminate the

cause of violence in Nigeria as anchored in 16 goal of SDGs will promote economic of peace

and secured business environment.

Nigeria economy like other economies of the world have suffers retrogression lately based on the

level of insecurity faced by its citizen. Billions of naira had been diverted from the national

treasury to cater for insurgency, internally displaced persons and huge amounts to armed forces.

The economic and social development of the world’s poorest countries is perhaps the greatest

challenges facing the world society at the represent time (Thirwall, 2008). Over one billion of the

world’s over six billion population lives in absolute poverty. The same number suffers from

various degrees of malnutrition, and millions have no access to safe water, health care or

education and inadequacy in the security of lives and property. This poverty is concentrated

largely in countries described as developing and co-exists with the affluence enjoyed by the vast

majority of people in countries described as developed.

The paper is structured into parts, beginning with this introduction. It is followed by reviewing

the relevant literature of peace economic. The paper then shows the budgetary allocation to

security from the National Budget in Nigeria and analyzed its implication on Nigeria’s economy.

Finally, concludes and recommendations were made to the findings.

Literature Review and Conceptual issues

Peace: The term peace is relative and the conditions for peace differ from one society or nation

to another. Ibeanue (2005) asserted that peace is a process involving activities that are linked to

increasing development and reducing conflict. It is described as justice and development, respect

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and tolerance between people, wholeness and making whole, and the absence of war. Despite its

relative nature, peace has a common denominator, i.e. the harmonious or friendly pursuit of

individual and collective interest defined by rules of conduct or standard of behaviour. Thus, in

this context, peace is described as a condition in which people live in agreement with accepted

standards of conduct or rules of behaviour that promote public good and the happiness of every

one. (Iekelegbe, 2004; Arong and Ikechukwu, 2013).

Peace economics: This is a specialized branch of economics. Peace economics focuses on the

design of the sociosphere's political, economic, and cultural institutions and their interacting

policies and actions with the goal of preventing, mitigating, or resolving violent conflict within

and between societies. Tinbergen (1990) also belongs to behaviorist school of thought, defining

peace economics as a science that seeks to understand how global and interstate conflict may be

resolved using economic principles and instruments.

This violent and conflict could be of any type and could involve either latent or actual violence

(Brauer and Dunne, 2012). Economic of peace has been use to understand the causes and effects

of violent conflict in the international system and the ways that conflict can be avoided,

managed, or resolved (Anderton and Carter, 2007).

Sustainable Development Goals: The Sustainable Development Goals are the blueprint to

achieve a better and more sustainable future for all. They address the global challenges,

including those related to poverty, inequality, climate change, environmental degradation, peace

and justice. The 17 Goals are all interconnected, and in order to leave no one behind, it is

important that these goals are achieve by 2030. The goal targets among other things to:

 Significantly reduce all forms of violence and related death rates everywhere.

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  End abuse, exploitation, trafficking and all forms of violence against and torture of

children.

 Promote the rule of law at the national and international levels and ensure equal access to

justice for all.

 By 2030, significantly reduce illicit financial and arms flows, strengthen the recovery and

return of stolen assets and combat all forms of organized crime.

 Substantially reduce corruption and bribery in all their forms.

 Develop effective, accountable and transparent institutions at all levels.

 Ensure responsive, inclusive, participatory and representative decision-making at all

levels.

 Broaden and strengthen the participation of developing countries in the institutions of

global governance.

 By 2030, provide legal identity for all, including birth registration.

 Ensure public access to information and protect fundamental freedoms, in accordance

with national legislation and international agreements.

 Strengthen relevant national institutions, including through international cooperation, for

building capacity at all levels, in particular in developing countries, to prevent violence

and combat terrorism and crime.

 Promote and enforce non-discriminatory laws and policies for sustainable development.

However, the targets for SDG16, on peaceful, just and inclusive societies, were strongly

endorsed by many policy advocates, but remained controversial in part because of geopolitical

policy compromises that will be noted below but also because of the absence of conversations

with peace and security experts during the process of developing the targets. Ribeiro-Pereira

5
(2014) the larger message of Goal 16 is widely affirmed: that the success of the 2030 Agenda

will depend on our ability to sustain stable, secure and inclusive societies governed by states that

are essentially trustworthy, responsive to constituents, free of corruption and committed to

eliminating violence, in part by reigning in coercive security institutions (Zuber, 2016). Thus, if

the projected targets of goal 16 for SDGs were met, free and economies of peace in Nigeria is

definitely attainable.

Returning to peace after war.

To develop a peace economics that provides guidance on how to create economies that are

peaceful and to keep them that way, means recognizing that all economic relations reflect the

logic of an underlying structure and that each phase of post war development can entail different

challenges and opportunities (Dunne, 2017). The first concerns to achieve economic of peace is

just how fighting ends. Wars end in different ways, some end abruptly and some peter out and it

can take time to negotiate and put into practice any peace agreement which may or may not

include provisions in regard to post-war economies. The end of different wars creates different

dynamics and path-dependencies. Second is rehabilitation and restoration. This will include the

removal of limitations on civilian economic activity, reestablishing civilian law and institutions,

disarming ex-combatants, demining roads, and returning displaced persons. Since economies

differ prior to war, it is unlikely that a standard post-war package will suffice, nor is it always

appropriate to return an economy to its pre-war state if, for instance, the pre-war economy was a

major cause of war to begin with. Third comes reconstruction and/or replacement: This entails

gaining financial resources for reconstruction, replacing and repairing physical capital and

infrastructure, demobilization and resettlement, rehabilitating victims, introducing or

reintroducing democratic structures, redeveloping and/or restructuring civilian institutions, and

6
beginning societal reconciliation. While the tasks at hand are likely to be similar across cases so

that reconstruction check lists can be useful, it is unlikely that the details will be similar. Fourth

is development and transformation. Here the need lies in adopting and implementing a new

vision, undertaking structural changes, establishing new institutions, and continuing

reconciliation (Bhavnani and Jha 2014). Each stage presents its own challenges and carries

different implications for international agencies that move in to support countries emerging from

violence. It is also the case that state and non-state agencies have their own interests and/or are

restricted in how involved they can get and what contribution they can make, depending on

structures and processes that already are in place. A war economy champions a logic that is very

far from a peace economy. Vested interests that make money out of violence may not coincide

with those that benefit from peace, so that moving away from conflict is difficult and peace

accords are fraught with the possibility of war recurrence. Indeed, peace is often declared even as

violence continues under the guise of peace. Returning to peace after war or violence means

creating social contracts that embed peace through institutional design, by designing the

necessary incentives, and determining the necessary roles of civil society. There will need to be

recognition that processes of post-war development will go through stages that require changes

in these incentives and structures. Major immediate concerns are policies for demobilization,

reintegration, and reconciliation as the post-war processes take shape (Brauer and Dunne, 2012).

Empirical Framework

Huang and Throsby (2011) examines Economic, political, and social determinants of peace,

using ordinary least squares (OLS) to regress the log of the peacefulness score on the

independent variables as a means of identifying the effects of individual variables when the other

explanatory variables are held constant. The result of the OLS estimation of the model shows on

7
economic factors that the most significant influence on peacefulness appears to be the openness

of the economy, with a strong positive effect apparent in the trade variable. Among the other

economic factors, it appears that the growth rate rather than the level of income is a determinant

of peacefulness, although the positive coefficient on the growth variable is not significant.

Fidelis and Egbere (2013) investigate the effect of the cost of peace, militancy and unrest or

peace accounting on the productivity of firms in Nigeria. secondary method of data collection

was employed and a longitudinal survey designed for a period of ten (10) years i.e. 2003-2012

was adopted. The data for the study were generated from the Central Bank of Nigeria’s

Statistical Bulletin of 2009. The result of the researchers’ analysis showed that cost of

peacekeeping in the Niger-Delta region of Nigeria has a significant negative impact on the

productivity of firms in Nigeria. It was therefore recommended that to eliminate cost of peace-

enthronement in the Niger-Delta region and consequently improve the economic development of

Nigeria, the federal government and her parastatals as well as the multinational oil companies

should pay special attention to the Niger-Delta question by making provision for higher level of

infrastructures to the people of Niger-Delta and Nigerians at large.

Edesiri and Egbunike (2016) stated that, the cost of ensuring national security is very high, but

measuring this cost has received little attention. the study examines the costs of peace accounting

and its implication for national security in Nigeria. Secondary data were obtained from the

Central Bank of Nigeria Statistical Bulletin and the International Monetary Fund Cross Country

Macroeconomic Statistics from 1996–2015. Ordinary Least Square estimation technique was

employed in analyzing the data and analysis performed via SPSS. The study found that

expenditure on internal security, cost of peace keeping and gross fixed capital formation are

dynamics of peace accounting.

8
Peace and its effects on Nigeria’s economy

Nigeria’s economic problem concerning the lack of peace and security are heterogeneous and it

is increasing on daily bases. Lack of peace and fragile peace will be the major obstacle to the

attainment of Sustainable Development Goals (SDGs) in Nigeria.

Arguably, all the key sector of Nigeria economy is effected by the quasi peace situation currently

facing the nation. According to Iduh (2011), Etekpe (2012), Balami, Ahmad and Yusuf (2016),

postulate that the effects of lack of peace and insecurity at the National Level in Nigeria will be

feat as highlighted:

 Destruction of life and property

 Destruction of national unity

 Reduction in capacity of people to add value to output

 Destruction of physical and social capital

 Increase rate of unemployment

 Damages the environment

 Decrease school attendance

 Slow down manpower development

 Disrupt private sector investment

 Slow down and hamper growth and transformation of the economy

 Make the expected gains from Foreign Direct Investment a mirage

 Decrease in capital formation

 Disruption of the democratic process.

9
  Interruption of farming activities leading to food insecurity

 Destruction of health infrastructure, products/pharmacies or chemists

 Destruction of educational facilities

 Increase production costs and volatility of market price

 Destruction of power/energy facilities and installations

Furthermore, number of studies have examined the determinants of intra-national and

international conflict. Economists in particular have looked at the economics of war and the

preparation for war, using military or defense expenditure as the primary indicator of a

dependent or explanatory variable. Such expenditure can be seen as defensive if a particular

country is not actively engaged in conflict, or offensive if it is engaged in war or preparing for

military operations. Either way, economists’ use of military or defense expenditure in their

analyses of the relationships between these expenditures and a range of economic variables has

meant that their studies have been orientated toward the economics of war rather than the

economics of peace. In Nigeria, maintaining peace and gain the economies of peace huge

budgetary allocation has been expended. In 2009, the Federal Government of Nigeria under the

administration of President Umaru Musa Yar, Adua, granted amnesty to militants and these

former militants are currently on the payroll of the government thereby reducing government

current revenue. (Adekeye,2007).

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The table below shows the allocation to security on National Budget (2010 – 2018)
Year National Budget Allocation to % on Budget
(N Tn) Security (N Bn)
2010 4.24 448 11
2011 4.97 920 19
2012 4.88 922 19
2013 4.99 923 19
2014 4.69 968 21
2015 4.49 934 21
2016 6.06 1.063 18
2017 7.29 1.42 19
2018 9.12 1.34tn 14
Source: LCCI 2013, Various CBN bulletins
From the table above, it indicates that huge amount of money have been allocated to security

from the national budget within the years. In year 2010, 11% which represents N448 billion out

of the N4.3 trillion of the total national budget of the country was allocated to national security

and defense. In year 2011, 2012 and 2013, 19% of the national budget was allocated to security

in the respective years. Also, 2014 and 2015, the allocation to national security/defense was 21%

each from the total national budget. From 2016, the national budgetary allocation for security has

increased to trillions of naira.

The implication is that if such monies were to be allocated to productive sector of the economy it

will impact positively in the socio- economic development of the country where the teeming

youths can be gainfully engaged.

Arguably, the state of insecurity in Nigeria should been minimal in view of percentage allocated

to security from the national budget over the years. Olufemi (2015) stated that the heads of the

country’s security agencies have repeatedly claimed allocations to the sector were insufficient to

11
equip the armed forces and make them operationally efficient to deliver on their mandates.

Defense is a critical sector and has enjoyed favourable consideration in funding, especially in

recent years. Despite of the high budgetary allocation on security and defense, the Nigeria socio

economic environment is yet to be free from terrorism, kidnappings, crude oil theft, armed

robbery, herdsmen attacks and other sundry crimes are also widespread across the country.

Graphical presentation

10 National Budget (N Tn)

9
8
7
6
5
4
3
2
1
0
Year 2010 2011 2012 2013 2014 2015 2016 2017 2018

National Budget (N Tn)

Source: Authors’ computation, 2019

The above graph depicts trend analysis showing national budgetary allocation from the year
2010 gradually to 2018. It can be seen that there is a progressive upward trend in the national
budget over time.

1200 Allocation to Security (N Bn)

1000
800
600
400
200
0 Allocation to Security (N...
2010 2011 2012 2013 2014 2015 2016 2017 2018

12
Source: Authors’ computation, 2019

The graph shows trend analysis on the budgetary allocation to security from the year 2010

gradually to 2018. It can be seen that there is a consistent allocation within 2011 to 2015, but a

sharp increase within 2017 to 2018; it is obvious that the amount allocated is so small to national

budgeted allocation.

% on Budget
25

20

15

10

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 % on Budget
Source:
Authors’ computation, 2019

The graph shows trend analysis on the percentage on the budgetary allocation from the year 2010

gradually to 2018. It can be seen that there is a consistent allocation within 2011 to 2016, but a a

gradual declination from 2017 to 2018

Conclusion

The stability of Nigeria economy towards sustainable growth and development depends on

peaceful state of lives and property. The governments have tried overtime to establish programs

and policies to cushion the effect. The Sustainable Development Goals have the enormous

13
potential for the economies of peace in Nigeria. The goal 16 of the SDGs target among others is

to significantly reduce all forms of violence and related death rates everywhere.

It is worthy to conclude in this paper that while progress in the realization of the SDGs in the

country has been significantly slow, a more rigorous and coherent approach and strategy can

significantly achieve some of the goals. As applicable with other development models adopted in

the country in past years, one cannot expect the full attainment of all the goals and targets of the

Millennium declaration, given the peculiar socio-cultural, economic and political terrain of the

country.

It is also important to appreciate that the SDGs are not discrete, stand-alone goals, but are inter-

linked so that failure to meet one is likely to have knock-on effects for some of the other goals.

This has enormous implications for a synergy and a multi sectoral broad-based implementation

approach.

Policy Recommendations

i. Social inclusiveness of all stakeholders; good governance and accountability of

available fund to national security should be transparent

ii. The NGOs involved in the SDGs programme should be monitored for transparency

and accountability in the approval and disbursement of funds for SDGs projects to

cater for peace making missions in Nigeria.

iii. A peace-promoting agenda that could strengthen institutions and advance policies that

address inequality and reduce the factors that trigger and sustain violent conflict.

iv. More tertiary institutions should be encouraged to offer courses in peace economics

both at under-graduate and post-graduate levels.

14
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