The Centre for Promotion of Private Enterprise (CPPE) has cautioned that military action might be harmful for Nigeria, with a yearly financial cost estimated at $2 billion, as concern of the Niger coup escalating grows.
The CPPE questioned whether the nation could afford the expense given the country’s present low public revenue, close to 100% debt service to revenue ratio, and growing debt. They asked for further reflection.
At the height of the Liberian conflict, Nigeria supported the Economic Community of West African States Monitoring Group (ECOMOG) at a cost of $8 billion and the deaths of hundreds of soldiers.
Additionally, in the capacity of its older brother, the nation lost $4 billion in Sierra Leone during its five-year civil war.
The loss, according to CPPE, might be even higher should the country agree to a military operation to resolve the Niger situation, given the inflationary trend of the intervening years and the opportunity cost of the military investment.
For a total of 12 years, the nation spent an average of $1 billion year to quell problems in the two West African nations that descended into civil conflict.
According to a study by CPPE’s Director-General, Dr. Muda Yusuf, the cost of yearly spending might be significantly higher given the cost of maintaining the human resources that would be deployed, the present costs of equipment, and the unique characteristics of the Sahel region.
“The lesson here is that the cost of military interventions can be very prohibitive. Similar military operations at this time may cost considerably higher, given the inflationary trend over the past 25 years. At the very minimum, it would cost Nigeria a minimum of $2 billion annually to prosecute a military operation in Niger, considering the prevailing geopolitical dynamics in the Sahel.”
“It will be difficult to accommodate such a huge financial commitment at this time without putting a serious strain on our fiscal operations and foreign reserves. With the benefit of hindsight, it is doubtful whether Nigeria got any significant benefit from the military interventions in both Liberia and Sierra Leone,” the economic think-tank confirmed.
The Economic Community of West African States (ECOWAS), which is led by President Bola Tinubu, is concerned about the potential commercial repercussions of the developing crisis and potential sanctions.
The crisis, it noted, would jeopardize the gains made thus far, even as it described the negotiation as a “defining moment for ECOWAS which calls for rigorous thinking, robust consultation, sound diplomatic judgment, a deep sense of history and an exhaustive evaluation of the many ramifications”.
“One of the key mandates of ECOWAS is the promotion of economic integration. Military actions among member states would surely negate this fundamental objective. It would perpetuate fragmentation of the region and trade within the region will be severely impacted. This has grave consequences for the economies of member states and the welfare of the citizens.”
“Already the recent border closure is beginning to adversely impact traders on both sides of the divide. The truth is that sanctions are typically a double-edged sword, which is why it needs to be cautiously and strategically applied,” the centre argued.
With “no concrete benefits” after each round of brotherly intervention, it was suggested that Nigeria frequently loses despite devoting so much of its personnel and financial resources.
The government should avoid military involvement in the neighboring country, according to the document, which mentioned the current weak balance of payments situation, the weak external sector, and the potential damage of assets during the war as justifications.
“If Nigeria decides to go ahead with a military campaign in Niger, our defense spending may have to increase substantially, possibly by 100 per cent or more. Over 70 per cent of the spending would have to be foreign exchange.”
“Though the military option would be an ECOWAS decision, the burden of prosecuting the operation would have to be borne substantially by Nigeria. These are scenarios we need to worry about,” the CPPE’s analysis
