Nigeria is becoming increasingly difficult to govern and allusions to its status as a failed state are rampant. Private military companies could make a comeback in the near future. While some media reports may be sensational in nature, they should not detract from the serious concerns for Nigeria’s security. Terrorism is at the forefront again. The Nigerian economy is in systemic turmoil. Nigeria’s political apparatus has become paralyzed. Africa’s largest exporter of hydrocarbons and economic powerhouse will need creative solutions to address its systemic issues.
KJ-1: It is highly likely that the Nigerian economy will continue to suffer from systemic deficiencies in the next 12 months.
- Although the Nigerian economy avoided a contraction this year, Nigeria experienced its most severe recession since the 1980s in 2020 following the imposition of COVID-19-related restrictions [source].
- The World Bank has termed Nigeria’s economic situation “paradoxical”. While growth forecasts have remained at 3% GDP, the total macroeconomic outlook remains poor [source].
- Moreover, GDP growth has slowed this year compared to 2021 [source].
- The combined effect of high inflation, the fiscal deficit and the amount of publicly held debt expose Nigeria to a greater degree of systemic risk than previously anticipated [source].
- Greater exposure to systemic risk has led to greater vulnerability of the economy to international stressors [source].
- Diminished foreign direct investment, volatile oil prices and increased prices for food and fertilizer imports are driving millions of Nigerians into poverty [source].
- Inflationary pressures are also driving a further 1 million Nigerians into poverty. Inflation is expected to rise higher than previously expected in 2021 to 15.5% [source].
- Nigeria will not benefit from higher global oil prices due to the Nigerian National Petroleum Corporation’s (NNPC) decision to deduct oil revenues in order to finance a fuel subsidy [source].
- Further, oil production will fall this year due to changing security dynamics, the inability of the NNPC to pay its share of operating costs and the degradation of critical infrastructure [source].
KJ-2: It is highly likely that Boko Haram and ISWAP will exploit Nigeria’s economic situation to boost recruitment in the next 12 months.
- Islamic militant groups in Nigeria are in need of rebuilding following a deadly conflict between Boko Haram and Islamic State West Africa Province (ISWAP) [source].
- Despite the infighting, ISWAP made gains against the multinational anti-terror force by capturing equipment and armoured vehicles [source].
- ISWAP demonstrated resiliency by surviving the loss of key leadership figures as well [source].
- ISWAP hands out seeds and fertilizer to civilians living in its territory. These handouts boosted agricultural production and crop output [source].
- ISWAP units in Yobe state are issuing rudimentary forms of financial loans as well as other basic services the government is unable to provide [source].
- Moreover, ISWAP has set up local markets and excises tolls on roads from locals in order to fund these rudimentary forms of social services [source].
- ISWAP and Boko Haram have increased the recruitment of child soldiers, attracting recruits with promises of food a shelter [source].
- Nigerian youth are heavily reliant on the oil industry for employment. Moreover, several of the government’s key promises to develop the oil industry have not come to fruition [source].
- Boko Haram freed 600 prisoners in a daring jailbreak in July. While half have been recaptured, over 300 are still on the run [source].
KJ-3: There is a realistic probability that the Nigerian government will not engage the services of private military contractors in the next 12 months.
- PMCs have operated in Nigeria since the late 1990s in exchange for oil and diamond concessions [source]. The administration of Goodluck Jonathan devolved security work to South African PMCs such as STTEPs [source].
- However, President Buhari is strongly opposed to the presence of PMCs in Nigeria [source].
- The Chief of Defence Staff Lucky Irabor insists that the military is able to handle the insurgency on its own [source].
- Irabor also claimed that the military would ensure an improvement to the security situation by 2023 [source].
- Following a meeting with President Buhari, the governor of Kaduna state, Nasir El-Rufai, suggested he may “import” mercenaries to handle the spiralling security situation [source].
- The governor of Borno state, Babagana Zulum, likewise called for the hiring of PMCs. Governor Zulum’s recommendation was debated by Nigeria’s lower legislative chamber last March [source].
- Buhari is ineligible to contest the 2023 general election. Moreover, his approval ratings have been tracking at consistently lower margins since 2019 [source].
- It is unclear which of the dozens of contenders for the 2023 election will prevail at this point. It is also unclear which candidates approve of the use of PMCs to fight insurgents [source].
Intelligence Cut-Off Date: 31 August 2022