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Counting the many cost of violence in Nigeria

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Counting the many cost of violence in Nigeria

Countries that are peaceful have healthier gross domestic products than countries that are less peaceful because peaceful countries spend less on equipment used to pursue violence, while countries that are more peaceful spend less pursuing violence. That is the general thought of the 2022 report of the Global Peace Index (GPI).

The GPI is an annual report by the Institute for Economics & Peace (IEP), an independent, non-partisan, non-profit think tank dedicated to shifting the world’s focus to peace as a positive, achievable, and tangible measure of human well-being and progress.

Over the last 11 years, Nigeria’s position in the GPI had declined by 6 positions from 142nd in 2011 to 148th in 2020. But while there is an improvement to the 143rd position in 2022 out of 163 countries covered, increasing violence is having a palpable negative impact on the Nigerian economy.

Violence and the fear of violence create significant economic disruptions. Violent incidents generate costs in the form of property damage, physical injury or psychological trauma. Fear of violence also alters economic behaviour, primarily by changing investment and consumption patterns. Expenditure on preventing and dealing with the consequences of violence diverts public and private resources away from productive activities and towards protective measures.

For instance, decades-long violent conflicts in the Middle Belt region of Nigeria between farmers and pastoralists have devastated local communities, drastically reducing economic activity. These resource-based conflicts have impeded market development and economic growth by destroying productive assets, reducing production, preventing trade, deterring investment in the private sector, and eroding trust between market actors.

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Mercy Corps, a global non-governmental, humanitarian aid organization operating in transitional contexts that have undergone, or have been undergoing various forms of economic, environmental, social and political instabilities, conducted a research in 2015 and found that:

Nigeria stands to gain up to US $13.7 billion annually in total macroeconomic progress in a scenario of peace between farmers and pastoralists in Benue, Kaduna, Nasarawa, and Plateau alone.
Reductions in farmer-pastoralist conflict are worth up to 2.79% of Nigeria’s officially reported GDP annually.
States affected by farmer-pastoralist conflicts lost an average of 47% of taxes (internally generated revenue (IGR) due to these conflicts.

Specifically, as of then,

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Plateau lost an estimated 75% of potential state revenue.
Kaduna lost an estimated 22% of potential state revenue.
Nasarawa lost an estimated 45% of potential state revenue.
Benue lost an estimated 44% of potential state revenue.

These estimates are six years old and the situation may not be too different than the situation today. Whatever the case, it does establish that there is a cost to violence.

The industries with the most to gain from farmer-pastoralist peace as measured by direct losses are crop production, food and beverage, and livestock. The industries that lose the most as measured by total losses are crop production, livestock, and trade.

In addition to the agriculture, livestock, and trade sectors, other industries that stand to benefit most from sustained peace include food and beverage industries, wage-earners, chemical products, manufacturing, petroleum products industries, manufacturing, financial services, and textiles.

Many other parts of Nigeria would be much more economically viable only if peace were to reign. This is apart from the fact that the federal government would be able to save much more resources from what is currently being invested to maintain peace in the many conflict areas in the country.

Violence does not only affect current economic activities but future generations as well. In a report released by UNICEF and other concerned government institutions in 2019, the economic impact of the violence against children in Nigeria is estimated to be about USD$6.1 billion, which is equivalent to about 1.35% of the country’s GDP.

On the global scale, the impact of violence was $16.5 trillion in 2021, equivalent to 10.9 per cent of global GDP, or $2,117 per person. The 2021 result represented an increase of 12.4%, or $1.8 trillion from the previous year, primarily due to higher levels of military expenditure.

The GPI says in 2021, the economic impact of Armed Conflict increased by 27% to $559.3 billion. This was driven by increases in the number of refugees and internally displaced people, and in GDP losses from conflict.

In the ten countries most affected by violence, the economic cost of violence averaged 34% of GDP in 2021, compared to 3.6% for the 10 least affected countries.

The global economic impact of refugees and internally displaced persons was more than three times higher than the GDP losses from conflict.

Considering the economic loss to violence, the IEP encourages countries to imbibe positive peace. Positive Peace is defined as the attitudes, institutions and structures that create and sustain peaceful societies. The same factors also lead to many other desirable socioeconomic outcomes. Higher levels of Positive Peace are statistically linked to greater income growth, better environmental outcomes, higher levels of wellbeing, superior developmental outcomes and stronger resilience.

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