By Eugene Itua AND Emmanuel Essien
The Investment Paradox in Nigeria’s Fragile Regions
Large swathes of Nigeria—particularly in the North-East, North-West, and North-Central regions—present a stark paradox. They possess significant, untapped economic potential in agriculture, solid minerals, and trade, yet are beset by complex and overlapping security crises. Insurgency, large-scale banditry, and protracted farmer-herder conflicts create a high-risk environment that deters the private investment essential for sustainable recovery, job creation, and long-term peace.
This article addresses this core challenge. It moves beyond traditional aid-based models to propose a market-driven, multi-layered De-risking Framework designed to dismantle barriers to investment systematically. By fostering a clear, predictable, and secure environment, this framework provides a viable pathway to unlock private capital, drive inclusive economic growth, and contribute directly to stability across Nigeria’s most vulnerable regions. This is a call to action for a new, collaborative approach to development, moving from risk aversion to risk management.
Mapping the Landscape: Conflict Typologies and Economic Potential
To navigate Nigeria’s complex investment terrain, it is essential to adopt a structured lens that captures both risks and opportunities. The matrix below (Table 1) offers a strategic overview of the three most conflict-impacted geopolitical zones. A unique security challenge characterises each zone, yet each also holds significant promise for economic development.
| Region & States | Conflict Typology | Conflict Driver(s) | Economic Potential |
| North-East (Borno, Adamawa, Yobe) | Insurgency | Protracted insurgency by Boko Haram/ISWAP, driven by ideological goals. | Historic hub for livestock, leather, fishing, and Sahelian trade. Strong potential for sorghum, millet, and cowpea cultivation. |
| North-West & Parts of North-Central (Zamfara, Katsina, Kaduna, Sokoto, Niger) | Banditry & Kidnapping | Organised criminal networks focused on kidnapping for ransom, cattle rustling, and control of illegal mining. | Major grain-producing zone (maize, rice, sorghum). Rich in gold, lead, and zinc (mostly informal mining). Kaduna is a key industrial and logistics hub. |
| North-Central (Benue, Plateau, Nasarawa, Taraba) | Farmer-Herder & Communal Clashes | Land and water disputes between sedentary farmers and pastoralist herders, exacerbated by climate change, demographic pressures, and ethnic tensions. | Nigeria’s “food basket”: a top producer of yams, soybeans, rice, sesame, and citrus. Strong prospects in food processing and agro-allied industries. |
Strategic Implication
This matrix is more than an academic exercise; it is a practical tool for strategic decision-making. By juxtaposing specific risks with concrete opportunities, it allows stakeholders to move beyond generalised perceptions of ‘no-go zones’. For an investor, it helps identify which ventures are most viable in a given context—for example, focusing on drought-resistant value chains in the North-East versus logistics and processing hubs in the North-Central.
Understanding the Core Investment Barriers
Analysis reveals four distinct categories of risk that deter private investment across these regions.
Physical Insecurity: The primary deterrent is the direct threat to personnel and assets from insurgents, bandits, and communal violence. This reality inflates security costs, delays projects, and disrupts operational continuity.
Legal Risk: Weak rule of law, inconsistent institutional capacity, and corruption create an unpredictable legal and regulatory environment. Investors fear that contracts will not be honoured and that dispute resolution is unreliable.
The De-risking Framework: A Three-Pillar Solution
To be effective, a de-risking strategy must address these barriers through an integrated, multi-pillar approach that protects capital, sweetens the deal, and builds market confidence. Crucially, this framework is not a substitute for the fundamental responsibilities of the state in providing security and public infrastructure. Rather, it is designed to operate in parallel, creating viable investment pathways even while these larger ‘hard barriers’ are being addressed.
This pillar focuses on creating direct safeguards against the most acute security and financial risks. By financially insulating investors from the worst outcomes of the hard barriers, it turns an unmanageable risk into a calculable one.
This pillar uses financial and policy incentives to make the risk-reward calculation more attractive for investors.
This pillar focuses on changing the narrative and providing the tools for informed, data-driven decision-making.
Governance and a Call to Action
The success of this framework hinges on a multi-stakeholder governance structure. This requires a Steering Committee of high-level public and private sector leaders for strategic oversight and a lean, professional Framework Management Unit (FMU), housed within a credible institution like the Nigerian Investment Promotion Commission (NIPC), to handle day-to-day coordination.
Secure Political Buy-In: The first step is to gain formal endorsement of the framework from key federal and state government stakeholders, ensuring top-level commitment.
Eugene Itua, Executive Director, Africa Green Economy and Sustainability Institute (AGESI)
Emmanuel Essien, Director, Africa Green Economy and Sustainability Institute (AGESI)
