• Sunday, June 23, 2024
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Rural entrepreneurship and the economics of insecurity in Nigeria (2)

Rural entrepreneurship

Nigeria is deep into an armed conflict; some even say it is actually a full state of war. Unfortunately, there are no trenches, no enemy locations and nothing like “no man’s land”, which we have in real wars. The enemies are essentially virtual. Boko Haram operates from Nigeria’s Sambisa forest in the Savannah, but nobody knows the exact spot. Occasionally we get information on their whereabouts and bomb them out. We actually see the videos of the targets being hit. Those raids may be successful but the only thing they seem to have guaranteed is that the terrorists will regroup soon after.

Their more daring siblings, the herdsmen are roaming the country running riots, in almost every part of the country, killing or kidnapping all those that are foolhardy enough to go to their farms alone. This has created palpable fear among farm families across the country and put a major obstacle in the way of the agrarian masses of Nigeria, to contribute maximally to national output and food security. Meanwhile, most rural dwellers in Nigeria, especially those from the north where these killings have taken root, are predominantly farmers. So, the most pervasive economic activity is put on hold.

Then there are the bandits – that uniquely Nigerian-made terrorist group that is known for precision attacks, even under curfews and lockdown. We can see the internally displaced people all over the place, as evidence of the conflict. We see casualties of Nigerians killed by different terrorist groups that have taken up arms against the state, especially Boko Haram and the so-called herdsmen. We also hear of the casualties being inflicted on the terrorists, which sometimes tell us the crisis may come to an end someday. There is no doubt that a major conflict is going on and people are being killed and displaced, economically and otherwise. What we do not see however, is a deceleration of the crisis and its effects on rural entrepreneurs. So, society if facing, squarely, the full impact of war on the society.

Rural entrepreneurs depend on rural credit markets, which vapourise at the first sign of crisis, leaving both entrepreneurs and their lenders in ruins. Tax policy that ignores the positive relationship between conflicts and microbankruptcy is the handiwork of zombies. Taxes are for the living and not living dead.

Sadly, we still run a country where those bestowed with public trust cannot be held to account; where the growth of Internally Generated Revenue (IGR), without reference to its sources and how the collection impacts society, is a trending index of successful governance. Therefore, despite the biting pains of war on the masses, internal revenue officials are making life a living hell for many small businesses. No matter how we explain it, there is something definitely wrong with the human side of any society that conducts itself in that manner.

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When conflicts destroy the livelihood of a community, people die twice – first when they lose their businesses and second, when they physically die. Most Internally Displaced Persons (IDPs)are waiting for their second death. Indeed, more people die economically than physically, in an armed conflict. The number of small and medium enterprises that have been destroyed over the past several years of conflict in Nigeria, especially in the north, is therefore very large.

Conflicts, be they communal, tribal or religious, have a negative impact on every level of economic activity, but the micro-level effects are very telling, especially on the most vulnerable among individuals and their businesses. This is why public policy should not just focus on the physical reconstruction of damaged community infrastructure but also on restoring the economic system –jobs and livelihoods. According to Baumol, entrepreneurs are “persons who are ingenious and creative in finding ways that add to their own wealth, power, and prestige.” They are driven by the possibility of increasing wealth, which disappeared under conflict situations. He further posits that this category of people can be productive, unproductive or even destructive in an economy, depending on the direction and effectiveness of public policy. Indeed, some of them are now racketeering on farm produce in the Northeast.

The implication of the above is that entrepreneurs, who have played critical roles in uplifting economies, may become unproductive or even dangerous, in the society, if public policy is not applied in such a way as to direct them towards the common good of the society. This happens when rent seeking, which is usually the outcome of ineffective policy design and application, becomes the main driver of private enterprise. Society uses the instrumentality of effective institutions to curb such tendencies. However, where personality cults determine the nature and direction of public policy, effective institutions are hard to build. Such institutions are necessary to help direct the course of development and to make sure economic agents behave according to set order, more so in a conflict environment. The laxity of public policy, often evident in conflict zones, is largely responsible for the apparent thriving of low level entrepreneurship, often in support of the enemy, and the absence of high level investing, during conflicts.

Much of current discussion of the consequences of the present state of unprecedented insecurity in Nigeria, and even the pandemic, has been largely at the macrolevel level – growth projections and recession, inflation and employment, and such economy-wide implications. The impact of the crises on the rural economy, particularly the destruction of the entrepreneurial class and their creative spirit, has not been fully appreciated. Recently, a number of states and the federal government in Nigeria have amplified their tax collection efforts, ostensibly to shore up falling revenues. There is no question about the fact that the government needs revenues to meet public finance needs. It needs to collect all possible taxes, especially when its major revenue source, say oil, is in decline. However, that is not a reason to be insensitive about the economic consequences of the ongoing war, on the rural economy and it and entrepreneurs.

Rural entrepreneurs depend on rural credit markets, which vapourise at the first sign of crisis, leaving both entrepreneurs and their lenders in ruins. Tax policy that ignores the positive relationship between conflicts and micro bankruptcy is the handiwork of zombies. Taxes are for the living and not living dead. Rural entrepreneurs in developing countries face serious socioeconomic challenges. These challenges are greatly amplified in conflict situations, especially where the enemy is literally virtual, as in the case of Nigeria. According to Amnesty International, so far, bandits have killed 1,126 and abducted over 380 Nigerians in the seven northern states. How many thriving enterprises do we reckon may have been erased in these areas? Unfortunately, we are still largely unable to identify those behind Boko Haram, the killer herdsmen and the raging bandit. Rebuilding broken bridges may avail nothing if there is uncertainty as to the identity and location of those who broke it.