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The Manufacturers Association of Nigeria (MAN) has warned the Federal Government and security agencies that surging insecurity in the country could fuel local manufacturers’ losses to logistics issues to surpass the N1.42 trillion recorded in 2023.
The Director-General, MAN , Mr. Segun Ajayi-Kadir, who made this known to New Telegraph in Lagos, said that logistics issues caused by insecurity, including attacks on haulage trucks and product hijacking were on the rise again and taking a toll on manufacturers’ bottom line and investment in the country.
He explained that insecurity was also discouraging foreign direct investment, as investors are reluctant to put their money into environments where personal safety and protection of property are uncertain.
According to him, Nigeria saw a sharp decline in foreign direct investments (FDIs) in 2023, with inflows falling to a mere $3.7 billion compared to $6 billion in 2022, quoting a data from the National Bureau of Statistics (NBS).
This reduction, according to him, is largely attributed to the growing insecurity that deters long-term investments.
Specifically, Ajayi-Kadir stated that several international companies in key sectors such as oil and gas, telecommunications, and real estate had paused expansion plans due to concerns about kidnapping and sabotage of critical infrastructure.
In addition, the MAN DG noted that the cost of maintaining security for business operations had skyrocketed. He said: “The consequences of insecurity for the Nigerian economy and businesses are devastating.
I will highlight a few of these impacts with practical examples. “The rising wave of insecurity has severely disrupted supply chains across various sectors, including manufacturing.
“The most glaring example is the frequency of attacks on transportation corridors, particularly the Abuja-Kaduna expressway, notorious for kidnapping and armed robbery.
In 2023, over 1,500 trucks were attacked nationwide, resulting in massive losses for industries that rely on land transportation to move goods. “Companies have had to employ private security forces, incurring additional operational costs.
“MAN recently reported that manufacturers lost N1.42 trillion in 2023 due to logistics issues caused by insecurity, including attacks on haulage trucks and product hijacking.”
He added: “The cost of maintaining security for business operations has skyrocketed. “Large corporations and even small- and medium-sized enter – prises (SMEs) are forced to spend a significant portion of their budgets on private security personnel, surveillance equipment, armored vehicles, and insurance.
“For example, a logistics company that operates across Nigeria reported a 30 per cent increase in its security budget between 2022 and 2023. “The increased cost of securing personnel and goods in transit has further exacerbated Nigeria’s overall cost of doing business.”
Speaking on agric sector’s insecurity, Ajayi-Kadir said: “Agriculture, a key sector of Nigeria’s economy, has not been spared.
The agricultural sector has seen a steady decline in production due to the unrelenting attacks by bandits and herdsmen on farmlands in key states like Benue, Katsina, and Zamfara.
and Zamfara. “As of December 2023, Nigeria’s rice output had fallen by 25 per cent, according to the Central Bank of Nigeria (CBN), largely because farmers have been forced to abandon their fields for fear of being attacked.
“This has increased the cost of food, leading to inflation, which hit 32.70 per cent in September 2024. The reduced agricultural productivity has caused significant food insecurity, driving up costs for both businesses and consumers.”
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