Dr. Rana Khalid Director and Head of Researcher of IFPMC-London
In this series, I would like to deal with a several of development experiences similar to the situation in Iraq, both in terms of challenges and opportunities.
Through this series of articles (development models),We will discuss the most important development issues with challenges similar to those of the business environment in Iraq. As well as, we offer to investment companies and entrepreneurs a picture of the Iraqi situation through similar economic situations.
Nigeria’s Development Challenges
globalisation’s dynamism is a powerful force, in some cases could cause Conflict and instability and a dramatic effect on the economic development of a region. but it is also important to note that it has also helped in several ways in resolving some of these conflicts .
Nigeria as a case study represents one of those developing economies that suffer from the contradictions of globalisation and its effects on business (Akinola, Adeoye O.2018.p4-5). For Nigerians economy and many developing societies, their survival depends on many of these multinational companies, multinational investment, either oil or diamonds and the like. However, many challenges threaten investment and growth in this country.
The first instability of recourses is terrorism. This problem represents What some researcher named, the underbelly of globalisation. as well as reflects a new form of wars which according to Mary Kaldor “wars that emerged in the concurrent rise of globalisation”.
Terrorism considered one of these new forms of wars. Also, a study of 78 developing countries found that even a small increase in terrorism leads to significant decreases in FDI (Bandyopadhyay, S .2013). Nigeria ranked third in the (global terrorism index, 2019.p8) with 8.597 scores, and placed third in the worst affected countries by the economic impact of terrorism with 2.7% of GDP (global terrorism index,2019.p29).
This problem is embodied in the ability of terrorist organizations -such as Boko Haram and others – to threaten the foreign investments in the country and create a state of insecurity that obstructs development efforts. (Rock, Jason L,2016). According to the United Nations’ World Investment Report 2019, Nigeria’s foreign direct investment dropped 43 percent to $2 billion and Nigeria is no longer the Largest FDI recipient in West Africa and this drop has been attributed to the risk of terrorism(UNCTAD 2019.p37).
The second instability resources are the strength of institutions. According to Blattman “political stability and the quality of institutions play an important role in fostering economic growth”.
The grounds of the institutional framework in Nigeria are unstable and have triggered deterioration of state governance and democratic accountability (Akinola, Adeoye O.2018.p24). According to McIntosh & Buckley” Corruption and mismanagement increase the likelihood of conflict”. Thus, Institutions in Nigeria are also under pressure from corruption, which increases their vulnerability and undermines their ability to stabilize the business environment.
strong institutions manage and maintain national infrastructure and resources could create an economic environment that encourages private investment .Particularly, political institutional weakness is reflected by weakness in institutions in the private sector, and in wider issues of corporate governance. In the longer term these challenges seem likely seriously to constrain levels of FDI and business (DFID U.K,2016).
these businesses should not allow interests in their investments to be invalidated their love for justice and fair play in society. That is Nigeria’s case, instead of waiting for a disaster. the problem of terrorism in Nigeria is a tough challenge for business and it needs process peacebuilding is more targeted than peacekeeping toward creating the attitudes, institutions, and structures that create and sustain peace in conflict-affected countries
Furthermore, the weakness of institutions represents the most serious challenge not only because they hinder the work of investment, but also because it gives continuity and justifications for conflict and instability in the country and delays economic recovery.
– Akinola, Adeoye O.2018,Globalisation , Democracy and Oil Sector Reform in Nigeria, Palgrave Macmillan, Switzerland,[PDF] Available In: https://books.google.co.uk/books?id=mUJJDwAAQBAJ&printsec=frontcover&dq=Globalization,+Democracy+and+Oil+Sector+Reform+in+Nigeria&hl=en&sa=X&ved=0ahUKEwick8bwq_
-Bandyopadhyay, S., T. Sandler, and J. Younas.2013. ‘Foreign direct investment, aid, and terrorism.’ Oxford Economic Papers, 66(1), Available In: https://academic.oup.com/oep/article/66/1/25/2362815
-DFID U.K ,2016.Privit sector development in countries progressing from poverty: Final Report, ECORYS, Nederland,[PDF],Available In: https://assets.publishing.service.gov.uk/media/57a0895a40f0b6497400002e/61510_Private-Sector-Development-in-Countries-Progressing-from-Poverty_040416.pdf [Accessed 13 Jun 2020]
– Institute for Economics & Peace. Global Terrorism Index 2019: Measuring the Impact of Terrorism, Sydney, November 2019. Available from: http://visionofhumanity.org/reports [Accessed 11 Jun 2020].
-Rock, Jason L,2016, The funding of Boko Haram and Nigeria’s actions to stop it Rock, Monterey, California: Naval Postgraduate School, Available In : https://core.ac.uk/download/pdf/81223377.pdf
– UNCTAD (United Nations Conference on Trade and Development). 2019. World Investment Report 2019: Special Economic Zone. Geneva: UNCTAD. Available In: https://unctad.org/en/PublicationsLibrary/wir2019_en.pdf