Worsening insecurity puts OPS under pressure for competitiveness

Private sector players are growing increasingly concerned that the worsening insecurity in Nigeria could hamper business expansion. Many are preparing to strengthen risk management, review their presence in high-risk areas and set up contingency measures to keep operations running, ARINZE NWAFOR reports

A fresh wave of mass abductions and violent attacks across Niger, Kebbi and Kwara states in November has rattled the country and deepened concerns among the organised private sector that Nigeria faces a worsening perception crisis capable of harming investor confidence and weakening the competitiveness of entrepreneurs.

The spotlight intensified after the government of the United States of America publicly condemned the killings, with President Donald Trump issuing warnings across media channels, alleging that a Christian genocide was ongoing in the country, and cautioned that continued attacks in Nigeria could trigger stronger diplomatic consequences. The Nigerian government denied the claims of a Christian genocide but welcomed the assistance of the US government to tackle rising insecurity.

The development has raised fears that the country could face harsher reputational and economic penalties at a time when businesses are already struggling with weak consumer spending, high interest rates and rising operational risks.

The renewed insecurity was marked by the abduction of 303 students and 12 teachers from St Mary’s Catholic School in Papiri, Niger State, on 21 November. Although about 50 students reportedly escaped, roughly 265 victims remain missing.

The attack in Papiri intensified national anxiety. Just days earlier, armed men invaded Maga Girls’ School in Kebbi State, abducting 25 schoolgirls and killing the school’s vice principal. The twin incidents followed the kidnapping of at least 10 farmers from villages in Shiroro, Niger State, according to reports from TVC and The International Centre for Investigative Reporting. Meanwhile, residents claimed the number was likely double.

In Kwara State, a year-long surge in violent attacks has resulted in more than 207 deaths and 177 abductions between January and November, according to data by The ICIR. The violence has swept across rural communities in Ifelodun, Pategi, Kaima, Irepodun and Osin LGAs, affecting farmers, traders and worshippers.

International attention on Nigeria

Global attention escalated after Trump accused Nigeria of “slaughtering Christians”, a remark business leaders say has worsened the country’s reputational damage.

The week the statement circulated, the Nigerian Exchange Limited recorded a N2.84tn loss, with a 2.90 per cent decline in market capitalisation as traders fled to safety. While economists insist the market reaction was temporary, OPS groups argue that the combination of domestic insecurity and negative global perception threatens long-term investment decisions.

They warn that if the insecurity persists, the reputational risks could harden into real economic consequences, affecting the agriculture and solid minerals sectors, as well as portfolio investors in particular.

Manufacturers warn of bigger risks if insecurity worsens

Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, told The PUNCH that the insecurity and the US spotlight on the killings could trigger broader economic instability if not contained swiftly. He said the earlier market decline was “a reactionary response to the political tension” but warned that persistent violence posed a more serious threat.

Ajayi-Kadir noted, “We will only begin to witness a deeper and more sustained impact on jobs if the threat of US military intervention in Nigeria’s insurgency-prone regions becomes a reality,” adding that such a development would “introduce real geopolitical and security risks with wide-ranging economic implications.”

The MAN DG said foreign investors were “highly sensitive to political instability and military conflict”, noting that even the anticipation of conflict heightens risk perception.

He also disclosed that some MAN members, including Berger Paints and Champion Breweries, had already begun feeling ripple effects from shrinking liquidity and rising operating tension.

“An active US military operation, or even the anticipation of it, would heighten risk perception, trigger capital flight and significantly weaken investor confidence in the financial and manufacturing sectors,” Ajayi-Kadir cautioned. “Berger Paint and Champions Brewery are some of our members who are already feeling the adverse impact, as witnessed last week.”

The DG explained that persistent insecurity would affect manufacturers in three critical ways: access to raw materials, logistics disruptions and foreign exchange pressure. He said many producers in the North already struggle to transport goods because they rely heavily on national road and rail networks that have become unsafe.

“If these conditions persist, firms may face shrinking profit margins, liquidity stress and declining output,” Ajayi-Kadir stressed, warning that this could result in temporary shutdowns or job rationalisation, especially for small and medium industries with limited financial buffers.

Ensuring safer industrial clusters

Ajayi-Kadir urged companies to reassess their operational footprint to minimise the impact. He said, “Our first advice to our members is risk containment. They should reassess their operational footprint, especially in conflict-prone regions.”

He advised manufacturers to adopt decentralised production hubs to avoid concentration risks, noting, “We urge them to develop a contingency plan by adopting decentralised production models or collaborating through industrial clusters in safer zones to sustain operations.”

He also urged firms to explore local sourcing more aggressively to manage foreign exchange exposure and strengthen ties with domestic banks to preserve liquidity during turbulent periods.

Ajayi-Kadir stressed that policymaking must now prioritise coordinated security reforms. He said Nigeria must show “transparent steps that it is firmly taking the bull by the horns” by strengthening the security forces, setting measurable timelines for results and sanctioning underperforming officials.

“The bandits and terrorists responsible for these atrocities must be decisively confronted, dismantled and prosecuted with no option of amnesty,” he said.

Economy is suffering from perception damage

Director of the Centre for Promotion of Private Enterprise, Dr Muda Yusuf, observed that the insecurity in Nigeria was somewhat “localised” but admitted the perception problem was worsening and could weigh heavily on investor decisions.

He explained that not all sectors feel the impact equally, stating, “Most of the economic activities in the country, trading, manufacturing, ICT and aviation, happen in the cities. So, the bigger effect of the insecurity will be on solid minerals and agriculture.”

But the CPPE chief warned that the global perception of Nigeria as unsafe was more damaging. “Anybody that is not in Nigeria and is reading all this news about Trump saying they are slaughtering people… that’s a perception problem it will create for us,” Yusuf asserted.

He warned that foreign investors would “think twice” before entering Nigeria because the international narrative suggests acute instability. He added, “People are anxious that if this continues, it will impact business, particularly those who relate with international investors.”

Yusuf noted that the initial anxiety has eased as US and Nigerian security agencies now appear to be engaging in more cooperative dialogue. He said, “They are now talking more about cooperation and supporting us. So that has reduced some of the anxiety.”

Market decline reflects sentiment, not company performance – OPS

Other members of the OPS, including the President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, said the earlier stock market dip was largely an emotional response triggered by foreign portfolio investors. The dip was temporary, as the Nigerian stock market recovered the next day.

He said, “The stock market price decline is not a reflection of individual company performance. It is a response to an external event.”

Idahosa emphasised that foreign portfolio investors are “quick to avoid trouble”, explaining that they were responsible for most of the sell-offs. “Domestic investors are indeed becoming victorious, but foreign portfolio investors still constitute a significant portion of the Nigerian stock market,” he said.

He argued that if Trump’s threats do not translate into concrete action, the market will recover. “If he does nothing beyond making threats, the market will recover as confidence returns,” he said.

Director-General of the Nigeria Employers’ Consultative Association, Adewale Oyerinde, assured that the volatility would not lead to immediate layoffs or factory closures.

He said, “The current loss, while worrisome, cannot be said to result in massive job loss, as the manufacturing and other sectors have built resilience to withstand temporary shocks.” Oyerinde said organised businesses were observing the situation as diplomatic engagements intensified.

National Vice President of the Nigerian Association of Small Scale Industrialists, Segun Kuti-George, described the N2.84tn loss as “a shock-induced dip” driven by weakened investor confidence.

He said investors were merely reacting to a risk signal. “It is normal that investors would want to see that as high risk and, as such, pull out their investment,” he said.

Kuti-George said the tension would not lead to job losses unless the insecurity is prolonged. He added that companies could hedge against currency risks through forward contracts and futures.

President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, said investors “work with perception” and respond quickly when they foresee risks. He warned that any instability affecting large firms would cascade to SMEs.

However, he noted that “if the government acts swiftly” and maintains security collaboration with business leaders, investor confidence would rebound.

Northern industry faces deeper structural concerns

Meanwhile, in a recent report, BusinessDay quoted the President of the Dangote Group, Aliko Dangote, as warning that insecurity and decades of unstable policy were crippling Northern economic growth.

Dangote said, “Imagine you are about to score a goal and someone suddenly tells you the goalpost is behind your back. That is how unpredictable government policy has been.”

He warned that inconsistent policies and electricity shortages have derailed industrialisation efforts and worsened the region’s economic fragility.