…Bigger than budgets of five states combined
Nigerians’ ransom payment to kidnappers in 12 months is bigger than the budget set aside for the defense of the nation’s territory in 2024, BusinessDay has found.
According to the latest Crime Experience and Security Perception Survey report released by the National Bureau of Statistics (NBS) on Tuesday, Nigerians paid N2.23 trillion as ransom to kidnappers in 12 months in 2024.
The amount surpasses the N1.647 trillion budgeted by the nation in 2024 for its Defense Headquarters, navy, army, air force, defense intelligence, Defense Industries Corporation, Military Pension Board, Air Force Institute of Technology Kaduna, and Defense College.
“The budget is quite infinitesimal, especially when you consider that it is just around $1 billion,” said Ike Ibeabuchi, an emerging markets expert.
“If Nigerians are paying more to kidnappers than the nation budgets for its defense, it shows you why we need to rejig our security and defense architecture.”
Read also: Kidnappers, armed robbers, cult groups, and Edo’s worsening security crisis
Bigger than Five States’ Budgets
Similarly, the estimated N2.23 trillion, which Nigerians paid as ransom to kidnappers in 12 months, is also more than the combined 2024 budgets of Ekiti (N521.5 billion), Gombe (N208 billion), Yobe (N216.95 billion), Kogi (N258.28 billion), Ondo (492 billion), which amounts to N1.69 trillion in total.
According to the NBS, 65 percent of households affected by kidnapping incidents resorted to paying ransoms to secure the release of victims. On average, each household paid N2.67 million.
“Nationally, an estimated 51,887,032 crime incidences were experienced by households.
“The North-West with about 14,402,254 reported the highest incidences of crime at household level, followed by North-Central (8,771,400), while South-East (6,176,031) reported the least.”
The report also shows that the crime incidence in the rural area, which stood at 26,526,069, was higher than that of the urban area at 25,360,963 incidents reported.
The total ransom paid over the 12-month period is also equivalent to 8.2 percent of Nigeria’s total federal budget for 2024, which stands at N28.8 trillion.
Ransom Drags Nigerian Economy
Experts say the report shows the effect of the kidnapping crisis on the nation’s economy.
“This is one of the reasons why poverty is deepening in the country as the families are struggling to raise money to rescue their loved ones in the hands of criminals. So, they do not really have much to take care of themselves and pay school fees and take care of the health of their loved ones,” said Awul Musa Rafsanjani, executive director, CISLAC, a civil society centre.
“It’s also contributing to the escalation of criminal activities because people know that when they do this, they get money and it appears that they are succeeding in this criminality. So, it’s not really good for the country. It’s not good for anybody.”
He noted that the security forces have failed to safeguard Nigerians from such criminals, forcing citizens to pay heavy ransoms to secure the release of their loved ones.
“It’s a shame for Nigerian security to have failed in its main occupation, which is to protect lives and property of the citizens.”
He noted also that the government has the capacity to address the problem if it truly prioritises citizens’ safety, blaming the current situation on the government’s failure to make citizens’ protection a priority.
In 2024, N3.85trn was allocated to the security and defence budget altogether. The estimated total ransom paid is 59.74 percent of the total security and defense budget.
The Nigerian defense got N1.647 trillion; the police force got N970 billion; the Ministry of Interior was given N471.625 billion, while the National Security Adviser (NSA) received N288.750 billion.
Kabiru Adamu, CEO, Beacon Security, explained that ransom payments are having a destructive impact on Nigeria’s economy. He noted that the majority of these funds circulate within the shadow economy, meaning they are outside formal financial systems and do not contribute to national development through taxation or other legal channels. This unregulated flow of funds, he said, is undermining economic stability.
Read also: Army arrests 12 kidnappers, recovers 14 motorcycles, others in Taraba
“A lot of this money is circulated within the shadow economy. The kidnappers don’t pay taxes naturally, so it’s destroying the economy.
“It also leads to increased criminality because most of them are youths. The more they see the perpetrators enjoying the proceeds of their crime, the more they will also be tempted to go into it.”
He noted that that ransom payments also enable the proliferation of small arms and light weapons, as criminals use the proceeds to acquire more sophisticated tools to sustain and escalate their activities. This, in turn, worsens insecurity across the country.
Adamu argued that the lucrative nature of kidnapping fuels a vicious cycle of criminality.
Adamu emphasised the role of weak compliance with financial regulations in enabling these transactions. He pointed out that Nigeria’s cashless policy, which could have helped trace ransom payments, is not fully implemented or monitored.
“The cashless policy that has been declared is not fully implemented; it’s not fully complied with, and so that makes it very difficult to monitor transactions,” he noted.
He also criticised commercial banks and fintech platforms for failing to enforce Know Your Customer (KYC) protocol, explaining that many fintech services allow users to open accounts without proper identity verification, creating loopholes that make it difficult to trace transactions.
“Number one, strengthen the cashless policy and ensure compliance to it. All those things that have been indicated, we need to be very serious about them and ensure that the regulators actually come and enforce compliance.”
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