Rising Numbers of Unregulated “AK-47” to Hurt FDI Attraction
Nigeria’s sky-high record of criminal activities amidst rising numbers of unregulated Avtomat Kalashnikova (AK-47), will hurt Nigerian economic recovery as guns keep the country less attractive to investors.
Booming gun-wielding criminal business have started impacting foreign investment attraction into Nigeria, the recent development being the social media giant’s, Twitter, decision to site its African office in neighbouring country, Ghana.
Due to foreign exchange scarcity, foreign investors have been on the side-line of the Nigerian financial market over Central Bank capital control policy. This, in addition, to heightening political risk has made Nigeria a high-risk investment destination despite her large consumers’ economy.
The nation’s insecurity hit the peak in recent time amidst pandemic-induced economic uncertainties, leaving millions of Nigerian out of meaningful employment.
Some logical thinkers, analysts explained the rising criminal activities could be a direct impact on joblessness, though President Muhammadu Buhari has restated plans to solving the economic misnomers.
Due to security lapses, kidnapping has returned to the country with a bang, just as some states are having a riotous time with security apparatus. Apart from political-economic policy, foreign investors are almost always conscious of the security risk of the nation before an investing decision.
Ahead of twitter’s Ghana choice, Nigerians were on a rampage for the #EndSARS struggle which some unknown, and yet-to-be-identified hoodlums hijacked, leading to the destruction of lives and properties.
Many foreign own businesses were affected just as a number of local companies counted their losses in a country with low insurance penetration.
“Investors would track historical political-economic play in the nation for the last 5 to 10 years to give them an insight into what would probably happen to their investment in a host economy.
“Twitter must have done due diligence as per where to locate their Africa office, the decision must have been on the company’s playbook even before #EndSARS
“You don’t reasonably expect Twitter who was actively monitoring even as it unfold to bring its investment down to Nigeria”, some analysts told MarketForces Africa.
The recent pattern indicates that apart from attacks on security personnel especially in the Eastern part of the country, criminal activities like Kidnapping have become a new business for some Nigerian elements.
The International Monetary Fund, IMF, projected that the Nigerian gross domestic product (GDP) will expand 2.5% in 2021 after tepid growth reported in the fourth quarter of 2020.
With foreign investors’ ratings the economy high risk for investment purposes, the Nigerian economy may suffer setbacks if the insecurity in the most populous country in Africa persists.
At the moment, Nigerian macroeconomic data are weak as the nation’s economy progressed to stagflation conditions with both inflation and unemployment rate peaked at 18.12% and 33.3%.
The misery index has worsened as food item prices have grown more than double across markets in a cash-driven economy without personal leverage.
Read Also: Nigeria’s Inflation Rate for March Projected to Hit 18.30%
With the declining value of Naira pursuing expensive basic needs for households, survival instincts in Nigeria appear to have peaked under the President Muhammadu Buhari-led All Progressive Congress (APC) administration.
However, at the moment, there is no official indication that the rising kidnapping cases is associated with joblessness in the country.
Rising Numbers of Unregulated “AK-47” to Hurt FDI Attraction
