CRISIS ECONOMY AND INSECURITY IN NIGERIA: THE POLITICAL ECONOMY OF VIOLENCE AND ECONOMIC DECLINE

Abstract

This paper examines the symbiotic relationship between crisis economy and pervasive insecurity in Nigeria, exploring how violence and economic decline operate as mutually reinforcing phenomena across the nation’s six geopolitical zones. The study adopts a qualitative research approach, drawing on secondary data from reputable sources, including the National Bureau of Statistics, the Institute for Economics & Peace (publisher of the Global Terrorism Index), the United Nations Office for the Coordination of Humanitarian Affairs, and extensive academic literature published between 2017 and 2026. The geographical scope covers Nigeria, with a purposive focus on five states representing distinct security challenges: Borno (North-East insurgency), Zamfara (North-West banditry), Benue (North-Central farmer–herder clashes), Rivers (South-South oil bunkering and militancy), and Imo (South-East secessionist agitations). The study is anchored in the Greed versus Grievance Theory developed by Paul Collier and Anke Hoeffler, which posits that conflict persists not merely due to ideological or ethnic grievances but also because violence creates profitable opportunities for armed groups, criminal networks, and corrupt officials who develop vested interests in sustained instability. The findings reveal that insecurity has systematically devastated Nigeria’s agricultural sector, with crop production declining by over 75 percent in Borno State, farmers in Zamfara paying extortionate harvest levies ranging from ₦5 million to ₦20 million, and over 615,000 persons displaced in Benue State alone. These disruptions have directly driven national food inflation above 40 percent, contributing to malnutrition affecting nearly 5.44 million children in northern states. The study documents over 3.2 million internally displaced persons nationwide, representing a significant loss of productive labour from economic activity. In the South-South region, illegal oil bunkering costs Nigeria billions in lost revenue while devastating fishing livelihoods through environmental degradation. In the South-East, sit-at-home orders have cost the regional economy an estimated ₦7.6 trillion between 2021 and 2025, paralysing informal markets and small businesses. Crucially, the research demonstrates how vested interests including corrupt officials who divert security funds, armed groups profiting from ransom and resource control, and criminal networks operating illicit economies actively undermine peace efforts because stability threatens their revenue streams. The study concludes that breaking this vicious cycle requires integrated strategies that combine security operations with economic recovery initiatives, accountability for fund diversion, and sincere political dialogue aimed at addressing structural grievances.