We Have Lost Over $100bn to Insecurity – Mailafia

Dr. Obadiah Mailafia

BEVERLY HILLS, May 02, (THEWILL) – Dr Obadiah Mailafia, renowned international Development Economist, one-time deputy governor at the Central Bank of Nigeria (CBN), former presidential candidate of the African Democratic Congress (ADC) and former chief of staff of the African, Caribbean and Pacific Group of States (ACP), is a prominent Nigerian statesman. In this interview with SAM DIALA, the ex-official of the African Development Bank Group, bares his mind on the colossal loss of lives and resources due to the spate of insecurity that has plagued and eclipsed Nigeria in recent times, especially in the last six years. He also proffered a way out.

Sir, what do you consider the major economic consequences of growing insecurity in Nigeria?

The economic consequences are very dire.  This thing has been going on for almost 10 years now and it is getting worse. Not too long ago, I did some basic calculations and I discovered that what we have lost due to insecurity, if we are to quantify it in monetary terms, exceeds $100 billion.  And how did I calculate this?

First is the amount of expenditure on the budget that is used for “security” both at the federal and state levels; just evaluate that amount.

Secondly, this money, which is now voted for “insecurity” could have been used for infrastructure and other development. So, we are ploughing money that could have been invested in infrastructure and human capital development into “security”.

The most tragic is this: ask the people, you will find out that most of that money was never used for security. It is pilfered and stolen away. That is one level.

The second level is to estimate the amount of damage done in all these areas where there has been wanton insecurity: There is a distraction from and destruction of economic activities, especially in the agrarian sector. There is destruction of infrastructure: a lot of buildings have been destroyed – schools, clinics – as a result of insecurity. That is the second aspect.

The third level is the impact on rural farmers. Insecurity has become so dire that people are so scared; a lot of farmers are not able to go back to their farms. And this is the planting season.  You can imagine the long-term cost. People are worrying if there might be famine this year. Even where farmers have planted, their crops have been destroyed and they get discouraged. So, you have phenomenal rising prices. People now work not to earn income but to feed the families, to survive.

The fourth aspect is the goodwill we have lost, especially internationally.  A lot of the money that would have come into this country through foreign direct investment and portfolio investment is lost. This is because, once people hear that a school has been raided, children have been taken away, an entire village has been blown up and there are scares of bombs here and there, of course, the investors  would not want to bring their money.

There are those that would want to brave it …?

Those who are brave to bring in money go into sectors that are capital intensive, they are near the coast and they can quickly leave. They are not investing in greenfield projects that have long-term gestation (to create jobs). They are not interested in other sectors.  That goodwill that is being lost, if you calculate it, it amounts to a lot of money.

The fifth point: there is capital flight.  By nature, capital flight in Nigeria is something you can’t really determine the precise figure because nobody has done a technical study on it. But to know that a lot of money leaves the country, you look at the unstable exchange rate, the high inflation rate, instability, the disequilibrium … even the elites are converting their money into dollars. Again, if you put all these together, the extent of economic damage is very huge.

Somebody once wrote a book on Trust.  Trust is very important not only to business but to nation-building and the economy generally. When we trust each other, we are comfortable doing business with each other. In a situation where you have killings and destruction, there has to be automatically an erosion of trust. And once that trust is eroded, it translates into reduced business activities and slower growth of our economic development.

So, what we are talking about is nothing less than $100 billion lost within the last couple of years. It is not only the quantitative aspect in the breakdown of trust, there is destruction of human relations, destruction of infrastructure, capital flight, degradation of human capital – a lot of our young ones and the highly gifted are leaving the country en masse.

This (insecurity) is really a project from hell and supervised by a deputation of demons from the pit of hell who call themselves leaders. This is really where we are today.

Under this circumstance, where do you see Nigeria in the next 5 years?

We have desertification, we have flooding, and ecosystem collapses as well, then dependence on one commodity whose value in the global financial market is very uncertain.  We have an elite who are extremely selfish, incompetent and very corrupt and who are ruling on the basis of nepotism and you get that feeling that there is an agenda which Chief Olusegun Obasanjo called ‘Fulanization’ and ‘Islamization’.  There are killings everywhere without regard to age or status, raping of women – our daughters and sisters are raped and the videos are sent around, this is an abuse of humanity.

Five years looks extremely long. No system can survive the kind of pressures that our system is currently undergoing.  Something, sooner or later, will have to happen. People have had enough. They know the country cannot take it anymore. The system will definitely collapse.  I am not speaking as an alarmist; I am not even speaking as a politician. I am speaking as a Development Economist and as a Policy Scientist who is looking at these things and the way the system functions.  This system is programmed to collapse. If we continue on the same path trajectory, it will not survive.

There is growing concern over the existing players and institutions that have endured and continued to support the fragile system.  Are you equally worried about their fate?

I put my trust in the indomitable courage and in the resilience of the great Nigerian people. Nigerians are able to get there.  When it comes to the economy, they are not looking for handouts. They are looking for a peaceful environment to help themselves and their families. But, what we are going through right now, we have never experienced before. Not even during the Nigerian Civil War.

What we are going through today is unprecedented: That we elected a government that is actually a foreign government; it is not a government of our citizens —  Building railways to foreign countries of which we know nothing;  building refineries in other people’s countries, using borrowed money from the Chinese, for which they have challenged our sovereignty. If this is not madness, I don’t know what madness is. I don’t know who will make them account for this combination of folly as well as wickedness.  I don’t know how else to describe it. It is totally unforgivable, totally unacceptable.

You cannot abuse the people up to that level. You cannot brutalize an entire country and hold them to ransom to that extent. And you created an atmosphere of fear. There is a culture of silence that has descended upon the country. Everybody is scared. Nobody wants to speak out. Nobody wants to stick out his neck. That fear is reinforcing primordial sentiments. We can only pray for a change of heart that they will commit sincerely to political reform of this country, and to rebuilding the institutions, so that they are more democratic and more accountable; to bring out people together, based on a national agenda. Not to divide our people on the basis of nepotism, on the basis of sectional agendas.

We will only hope they will see light and they will make change because if they don’t, people at this point have no option other than to resist them. And People are going to resist them.

What people do not realize is that Nigerians are a very ancient people. If you look at the Middle Belt, you see civilization that is traced to Egypt of the Pharos. They invented iron before the Greeks and the Romans of old. If you look at Ile-Ife, it is 1,000 years. The Benin Empire is almost 2,000 years old.  The Efik people have a similar system of writing as the Jews and the Hebrews, the Kanem-Borno Empire – these are very ancient civilizations of over 1,000 years.

They are not going to sit back and watch people who came to Nigeria just 200 years ago. They are not going to sit back and be destroyed by foreigners who came only 200 years ago … and believe that their race is superior, (that) they are born to rule, they can lord it over us because the British in their collective stupidity came here and told them they were a race very superior to the others and were born to rule over the rest of us. It is the greatest self-deceit of the century. And they will later find out they have lived in a very big lie. The ancient cultures of Nigeria are very strong; they will resist and they will defeat them.