Security - Several key conflicts continue to escalate across the country

Companies operating exclusively in Lagos are unlikely to be directly affected

MNCs should monitor security developments and assess whether the location of major incidents will impact their route to market outside major urban centers. Moreover, they should consider offering support, such as flexible payment terms, for local partners pressured by increased insurance premiums and security costs. Additionally, firms selling to the public sector should prepare for potential budget cuts to areas outside security and key transport infrastructure, such as CAPEX on education and the expansion of free healthcare.


In late March 2022, gunmen used explosives to derail a train in Katari (in Kaduna state), as it traveled from Abuja to Kaduna city. They killed at least 60 people and kidnapped more than 100 others. Additionally, numerous low-level conflicts exist in across the country, tied to religious fundamentalism, secessionism, and natural resources. Recent data showed that in January–September 2021, the government’s capital spending on defense was 191.4% higher than planned for the full year, compared to -56.4% for total capital spending.

Our View

Insecurity is likely to gradually worsen in 2022, especially in H2 as the February 2023 election nears and state security is stretched by related pockets of unrest. However, a sharp collapse in security is not expected. While the commercial hubs of Lagos and Abuja are unlikely to be directly impacted, there is an elevated risk of a sudden loss of market access to towns and rural areas in much of the country. Public spending on defense will remain well above target in 2022—despite a 14.5% YOY increase in the 2022 budget—as authorities aim to assert control over the situation. This will likely squeeze other areas of public spending—most likely, CAPEX. The election provides further impetus for the government to prioritize defense this year.

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