The billions that are budgeted and expended on defence-related expenditures in Nigeria do not justify the outputs we see on the ground. The main players in the Nigerian ‘Defence industry’ (to be explained later) comprise the President who by virtue of occupying this position is also the Commander in Chief of the armed forces, Minister of defence and the defence ministry, the armed forces (Army, Navy and the Air-force) and the moribund  Defence Industries Corporation.

Nigeria at present need men of vision who could transform the defence expenditures from the present state where it is at best used to put food on the tables of foreign workers and at worst, mostly end up in private pockets as usual. Tellingly, none of the presidential candidates during the last elections made defence expenditure an issue either out of ignorance or fear of the military top brass. The Defence Ministers are not better since none of them has ever articulated any vision for the transformation of the sector to serve the interests of Nigeria and Nigerians.

Present state of Defence expenditure and industry in Nigeria and content

There is no distinct defence industry in Nigeria at present if a defence industry fits the following description of “A distinct sector, contributing to national development by its operations and activities, through the employment of specialized workers and resources to effect the production of a diversified range of defence related products and competitively marketing such products within and outside the country” (Author’s definition). The bulk of Nigeria’s defence needs are imported even where local producers could conveniently produce or supported to produce these items.

The nations’ defence needs comprise of two distinct components namely the civilian and the military. The civilian components consist of items and materials like uniforms, formal parade wears, boots, sports shoes, sports wear, under-vests, berets, belts, webbing equipments, cars and trucks while the military components comprise of equipments like combat vehicles, airplanes, ships, tanks, computers, radar equipments, light weapons and artillery weapons to mention just a few.

While it might be justified somehow that the production of the military components of the nations’ defence requirements cannot at present be met locally, there is no single justification for the importation of the civilian components. On average, the defence sector consumes anything from 5- 10 % of the national budget according to the CBN annual Statement of Accounts (Various) and it is criminally negligent of any government to allow the resources meant for the well-being of Nigerians to shore up foreign economies and put food on foreign tables while Nigerians are walking the streets in search of employment.

Contributions of Nigeria’s Defence Budgets to the local Economy

As stated above, there is no distinct defence industry in Nigeria at present but the contributions of the defence budgets could be measured in terms of the visible contributions to the Nigerian economy. Defence budgets pay the salaries of armed forces personnel, thus enabling them to take care of basic needs for selves and families. Medical services, education and training (Local and foreign) for all that it is worth comes from the defence budget. Purchase of foodstuffs for the troops on foreign missions also comes from defence budgets. These expenditures however do not form the bulk of defence spending. The bulk of defence spending goes on procurement of materials and equipments and this is where the need to use defence expenditures to promote growth of local industries becomes important.

Features of Defence Industries and Spending in Developed Economies

o       Defence spending is mostly done internally in the procurement of the civilian and military components of defence needs.

o       Defence industries in developed nations are in private hands and regulated by the government.

o       Government patronage keeps the defence contractors busy while they also compete in the export market.

o       Defence sectors are big employers of specialized labour; carry out capacity building activities to update staff on current trends and influential in policy formulations.

o       Defence sectors act as sources of R&D efforts that lead to development of new technologies adapted for civilian uses.

o       Research and development efforts in defence industries are funded through private sector initiatives and sometimes on partnership with the government.

What Defence Budgets are not being used for in Nigeria.

Having explained the features of defence industries and spending in developed countries, it is important to also look at what defence spending is not doing in Nigeria since we do not have a defence industry (Forget about the Defence Industries Corporation).

• Provision and sustenance of employment in industries such as textiles, leather goods, food processing, metal fabrication, electronics etc.) as opposed to using our resources to put food on foreign tables by propping up the factories in China, Britain, USA, Sweden and Holland to mention just a few.

   

• Promotion of research and Development through grants to the concerned industries, tertiary institutions and individuals (I read about the case of the University student who designed a helicopter that has flown single-handedly. These type of individuals should be encouraged through grants to better their research efforts)

   

• Promotion of civilian application of fruits and outcomes of R&D in military science.

   

• Serve as an engine of growth for the Nigerian economy.

   

• Promote transparency and accountability by providing a level playing field for all stakeholders.

   

Arguments in Favour of Liberalization of Defence Procurement in Nigeria

• Permitting and encouraging Nigerian owned companies to actively engage in production of defence-related goods and equipments will create competition and efficient management of resources.

   

• Liberalization of defence procurement will also free the government to concentrate on the business of governance, disengage the military top brass from playing politics with defence budgets and promote accountability.

   

• Improve funding for research and development through private sector participation and funding.

   

• Creation and sustenance of long-term employment for Nigerian workers.

   

• Can form the basis for Nigeria’s quest for industrial growth as opposed to jetting around the world to bring dubious ‘investors’ who comes to Nigeria to start borrowing funds from banks to ‘invest’ in the economy.

   

• Liberalization will sharply reduce corruption and cronyism in award of defence contracts.

   

• Promotion of transparency and accountability in defence spending.

   

Specific Local Industries and Possible Roles

It is not enough to agitate for the active involvement of local manufacturers in the production of defence-related goods and equipments but we will go further here by mentioning some specific industries that could be strengthened if they are actively involved.

• Textiles: Production of clothing needs of the armed forces personnel. Private tailoring companies will also gain and keep thousands of Nigerian youths off the ‘Okadas’ if they are given contracts to sew uniforms for Nigerian military personnel here in Nigeria.

   

• Footwear and leather goods: Production of military boots, running shoes, belts, web equipment etc. It is estimated that each military personnel requires three pairs of military boots and two pairs of running shoes every year. What this translates into is the production of at least one million pairs of military boots and half a million pairs of running shoes for the local market and maybe another 2.5 million pairs for export. We should all imagine the number of unemployed Nigerians that will be taken off the streets by the Nigerian companies to meet the production target here.

   

• Metal fabrication and vehicle assembly plants: Manufacturing or assembling of armoured personnel carriers, tanks, military vehicles, buses and parts for ships and planes.

   

• Food Processing: manufacture of Meals Ready to Eat (MREs) for military personnel on exercises or combat missions.

   

• Plastics and aluminum: Production of utensils, buckets, pipes.

   

Roles of the Affected Industries, MAN and NLC

The industries mentioned above, Manufacturers Association of Nigeria (MAN) and the Nigerian Labour Congress (NLC) could play active roles in changing of policy direction when it comes to defence spending in Nigeria. Some of the roles envisaged for these key stakeholders include the following;

• Lobbying the government to adopt Nigeria industry friendly policies in defence spending. As is usually done on developed countries, Senators coming from areas where these industries are located has to be put under pressure to advocate for the adoption of policies that could keep them in operation by the concerned organizations. The services of professional lobbying organizations might have to be engaged for this to be effective.

   

• The Nigerian Labour Congress need to sensitize Nigerian workers through aggressive information campaigns to ensure they protect their jobs. As mentioned several times in this essay, the resources of Nigeria has to be used to keep food on Nigerian tables and not to be used to prop up foreign organizations as presently being done by the government. Rallies, engagement of Nigerian government officials on discussions, demonstrations and sit-ins might be necessary to force the government to listen.

   

• Where they are already involved in production of items, the concerned organizations should ensure that strict quality control measures are put in place to meet up with international standards in production of defence-related items. Doing this will not allow the players in disbursement of defence expenditures make claims that what they are producing are sub-standard even though they are awarding contracts to backyard Chinese companies to manufacture running shoes that falls off the feet of soldiers and under wears that tears on first usage.

   

• Making sure the issue of defence spending becomes an election issue through sensitization of the populace at large. The potentials need to be explained to the generality of the Nigerian population in ways they could easily grasp (Radio jingles, television adverts, posters, town hall meetings etc) to make sure defence spending becomes an issue on election campaigns.

   

Roles of the Government in the

• Passing of the enabling legislation to permit local manufacturers participate in defence production and export.

   

• Credit guarantees for participating manufacturers. This will allow them procure new equipments and upgrade machineries.

   

• Export rebates on defence related goods manufactured in Nigeria by Nigerians and exported. This is opposed to opportunists coming to Nigeria to establish factories to evade taxes. Favourable import tariffs will also help to make the goods produced competitive in export markets.

   

• Patronage through the award of defence related contracts to Nigerians to improve capacity.

   

• Coordination, monitoring and authorization of export orders by defence producers.

   

Myths about Nigeria’s Defence Spending

Those in charge of disbursing Nigeria’s defence budgets have woven some myths around defence expenditures which has allowed them over the years to get away with ‘Murder’. Some of these myths are explained below and have no basis in fact. The secrecy which has shrouded defence expenditures has allowed lots of untoward activities (corruption, money laundering) to occur and it is only liberalization that could eliminate this.

• Liberalization of defence industry will jeopardize Nigeria’s security.

   

• Nigerian does not have the capacity to produce her defence needs, even the civilian components. 

   

• Government should resuscitate Defence Industries Corporation (DIC), continue funding and managing it.

   

• Military personnel are best suited to manage the defence industry.

   

• Nigeria’s’ defence spending cannot and should not be open for scrutiny for security reasons.

   

• Protectionism fears and protests from our trading partners; (Please see my comments in the next section)

   

Debunking the Myths

• Liberalization of defence industry in Nigeria will actually improve our security by reducing defence expenditure and our reliance on foreign producers and suppliers whose stock in trade is production and export of low-quality items for the Nigerian armed forces.

   

• Nigeria has the capacity to produce her defence needs, most especially the civilian components and with government support, the military components can be produced too. First, capacities do not exist in vacuum and have to be consciously created. Secondly, most Nigerian manufacturers are more organized in terms of personnel and machineries than those backyard manufacturers being awarded defence contracts.

   

• Military personnel are not best suited to manage the defence budgets and expenditures because they lack the capacity to do this.

   

• Resuscitation of DIC. Billions have been sunk into this white elephant and nothing has been seen in return. I will rather advocate the closure or sale of DIC to Nigerian investors to manage and turn it around.

   

• Nigeria’s defence expenditures should be open for scrutiny. Defence spending should be treated like any other government expenditure; it should be open, transparent and follow laid-down procedures.

   

• Protectionism fears and protests from our trading partners. This should not stop the government in any way in the implementation of this important policy shift to allow private sector participation. The first responsibility of the Nigerian government is towards Nigerians. Our defence expenditures should be used as a vehicle for development, used to reduce unemployment and put food on Nigerian tables. Does anyone see the American government reversing a decision to please Nigerians? Impossible because of the perceived responsibility of the government towards American citizens.

   

Conclusion

This essay has focused on the present state of defence budgets in Nigeria and impacts on some selected industries. We have also focused on the roles of various stakeholders and what they could do to ensure defence budgets work in the interest of Nigerian workers. The essay has also stated and debunked the myths associated with defence budgets. It is hoped that the concerned stakeholders will use the limitless opportunities presented through defence expenditures to improve their fortunes and also engage professional assistance in how this could be achieved.

  N.B. This essay formed part of and an improvement upon a thesis submitted to the Department of Economics, University of Maiduguri, Maiduguri, Borno State, Nigeria in partial fulfillment of the award of a B.Sc. (Honours) Degree in Economics in 1997 by the author titled 'Nigeria's Defence Expenditures and their Impact on Armed Forces Personnel Welfare: A Case Study of Biu Military Cantonment, Biu, Borno State from 1985-1995).

Robot  Villager

# 1 The billions that are budgeted and expended on defence-related expenditures in ...Read the full article. Posted by Robot| 17.09.2008 21:52