Rising insecurity threatens Nigeria’s economic reform gains
President Bola Tinubu’s market-friendly reforms are beginning to restore investor confidence and stabilise Africa’s top oil producer after years of policy missteps, but a surge in insecurity is threatening to undermine the progress.
Since taking office in May 2023, Tinubu has scrapped costly fuel subsidies, unified the country’s multiple exchange rates, and taken steps to attract foreign capital.
The reforms have earned praise from multilateral institutions and signalled a break from the interventionist policies that hampered Nigeria’s growth.
But insecurity—long a drag on Nigeria’s economy—is intensifying across key regions. In the North, jihadist groups continue to target rural communities. In the South-East, separatist agitation has disrupted transport and trade. Meanwhile, banditry and kidnappings for ransom have become rampant in central and north-Western States.
Ibunkunolu James, research and policy analyst at BudgIT, said businesses are cutting down operations or entirely closing up and relocating to other countries as a result of insecurity in the country.
“The incessant kidnappings have affected foreign direct investments (FDIs), interstate travel, and transportation of goods and services from one state to another,” James said in a piece entitled, ‘Nigeria’s Rising Insecurity: Implications for the Nigerian Economy.’
“The resulting loss of income and economic opportunities further compounds the challenges faced by the affected population.”
The deteriorating security landscape poses a major risk to Tinubu’s economic agenda, deterring investment and driving up costs for businesses already grappling with high inflation and weak infrastructure.
The spate of insecurity experienced in a nation that’s begun to interest foreign investors due to its recent economic stability could be ‘damning’ as capital flows to countries with lower risks and higher returns, experts say.
This wave of violence in the country, with the latest being the gruesome killings of some 200 people in Nigeria’s food basket state, Benue, and the Borno suicide bombing which killed 24 persons, suggests the lingering insecurity is far from being combated.
Not fewer than 1,043 people were killed in Benue State between May 2023 and May 2025, according to Beacon Security and Intelligence Limited data. Within that same period, the State ranking of fatalities in Nigeria shows Benue State as 5th behind Borno, Zamfara, Katsina, and Niger.
In the South-East part of the country, where Mondays are for ‘sit-at-home,’ the story has even been more gory.
Data from intelligence gathering firm, SBM Intel, shows that the region has recorded an estimated N7.6 trillion losses in four years off the back of the separatist Indigenous People of Biafra (IPOB)’s sit-at-home order.
Investors take to their heels when the safety of their investments is threatened, culminating into job losses, weakening productivity and overall shutdown of the nation’s economy.
“Economic reforms are critical, but they won’t yield full benefits unless matched by security gains,” said Mosope Davies, a Lagos-based economist. “Investors are watching not just macro policy, but the ease of doing business on the ground.”
Basil Abia, an investment analyst, explained that farmers are reducing the level of outreach they have in terms of cultivation as insecurity worsens. He revealed that farmers pay taxes to terror groups before they can be allowed to farm.
“The last six months in Nigeria’s history have seen us record our worst insecurity numbers. We now have as many as six different transnational terror groups bedevilling us with over 10,000 fatalities in the last two years since President Tinubu took over the presidency,” Abia said.
According to Ikemesit Effiong, partner at SBM Intelligence, successive governments have yet to decisively tackle insecurity in Africa’s most populous nation, even as budgetary allocations to the defence ministry keep swelling.
“On security, the administration has noticeably underperformed and, like its predecessors, it has been more reactive than proactive,” Effiong said.
“There is still no clear strategy for addressing the country’s many security challenges and current measures have failed to stem the rising spate of incidents, casualties and the scale of operations of malign actors,” he added.
As Tinubu doubles down on fiscal and monetary adjustments, analysts warn that the government must prioritise security or risk a reversal of the fragile recovery.
Source: Business Day