March 29

Boko Haram Seeks to Expand South, Nigeria’s Economy may Suffer

Abubakar Shekau

Abubakar Shekau

Boko Haram’s leader, Abubakar Shekau (aka Darul Tawheed), recently released a video in which he encourages attacks in southern Nigeria. Shekau states, “My brethren wherever you are, in Abuja, Lagos, or the south-south, wherever you are, commence attacks.” This is a disturbing development as Boko Haram has primarily operated within the confines of the northern states of Adamawa, Borno and Yobe. In addition, the group’s effectiveness in conducting attacks has improved significantly over time. Boko Haram’s March 14th assault on the Giwa Barracks prison in Maiduguri (in which an estimated 600 fleeing prisoners were executed by the military) serves as evidence of Boko Haram’s growing ability to conduct increasingly effective and lethal operations.

Should Boko Haram expand south, stability within both Nigeria and the region will be significantly degraded; potentially resulting in a drastic reduction in FDI. Currently, Nigeria receives the largest amount of FDI in sub-Saharan Africa (roughly 10%-15% of the regions total) and Rand Merchant Bank (RMB) recently ranked Nigeria as Africa’s second top investment destination; following behind South Africa and placing ahead of Egypt. Should instability spread throughout Nigeria (particularly into the cities of Abuja and Lagos) foreign investment into Nigeria’s petroleum sector may be drastically reduced; preventing Nigeria from integrating into globalization’s core.

The Jonathan administration must adopt an effective counterinsurgency (COIN) strategy soon if it wishes to maintain positive economic growth through FDI. Investors crave stability, and should Boko Haram expand throughout Nigeria, these potential investors will take their money elsewhere. Currently, Nigeria has the potential to become one of the most powerful economies in Africa, but to achieve this end, the Nigerian government must develop an effective COIN strategy to deal with Boko Haram; one that focuses on integrating northern Muslims into mainstream society, investing in infrastructure in the northern states and targeting of key leadership within Boko Haram. Should the Jonathan administration continue using heavy handed tactics (such as the aforementioned execution of fleeing prisoners) to deal with the insurgency, focusing on short term success rather then long term stability, the economic repercussions could be significant.