• Saturday, December 02, 2023
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CBN spending on national security hits record high

CBN declares no transactions on accounts without BVN, NIN from March 2024

The amount spent by the Central Bank of Nigeria (CBN) on national security almost tripled last year to a record high of N125.3 billion.

Data from its consolidated financial statements showed the CBN spent N507 billion on national security, armed forces, and state security, among others, between 2014 and 2022.

“Intervention activities expenses represent expenses carried out by CBN in connection with national security, federal government, state securities, armed forces, and financial sector capacity building where there is an important need for the fund,” CBN said.

It added, “All payments made in relation to intervention activities embarked on by the Group are expensed as incurred. However, payments made by the Group in relation to intervention activities on behalf of the Federal Government are recognised as receivables and are fully impaired after 12 months if the amount is not received from the Federal Government.”

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Further breakdown showed the CBN spent N45.4 billion in 2021; N28.6 billion in 2020; N21.4 billion in 2019; N44.9 billion in 2018; N19.3 billion in 2017 and N38.5 billion in 2016.

Experts said terrorism and other forms of insecurity have persisted for more than a decade unabated, despite the billions of naira spent on security annually by the Nigerian government.

Available reports showed Nigeria has one of the highest security expenditures in Africa, but for many years, that has not translated into improved security.

A 2019 report by the United Nations Development Programme, titled ‘Measuring the Economic Impact of Violent Extremism in Africa’, revealed the impact of terrorism in African countries, with Nigeria leading in terms of fatalities and economic loss.

According to the report, Nigeria lost $40.828 million in terms of the cost of fatalities and injuries, and an estimated $598.8 million in terms of cost of destruction of properties.

The report also shows that Nigeria had the highest security spending at $78.43 billion in 2017, followed by Morocco at $42.52 billion. But, while Morocco saw the lowest security threat within the period with less than 2,000 fatalities, Nigeria had the highest in the African region with more than 180,000 fatalities.

The report further found that Nigeria and other countries with higher levels of violent extremism have had weaker economic growth than other countries. It revealed that within the group of focus countries, there is a 64 percent difference in GDP growth between those with high and low levels of terrorism.

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It said: “From 2002 to 2016 on average, at-risk countries grew their GDP per capita by 47 percent and spill-over countries grew by 36 percent. In contrast, epicentre countries (such as Nigeria) on average had a 17 percent decline in GDP per capita.

“From 2002 to 2016 across the different groups in the focus countries. Epicentre countries had a decrease in GDP per capita growth in 2011 with the onset of the Libyan conflict and a slowdown in growth in Nigeria. The slowdown in growth in the epicentre countries lagged behind the increase in the impact of terrorism, which really took off after 2006.”

In 2020 alone, Nigeria lost $40.6 billion worth of investments to insecurity, according to the Global Terrorism Index.

Apart from the destruction of lives and property, the Nigerian economy continues to suffer as rising insecurity dents investors’ appetite to invest in the country.