Adequate defense funding and Nigeria's national security capability

REALISTIC FUNDING FOR AN EFFECTIVE NATIONAL DEFENCE POLICY: NIGERIA IN FOCUS
INTRODUCTION
1. The need to ensure adequate security for the wellbeing of citizens has been the objective of nations since the formation of nation states. Nations thus ensure the provision of adequate resources for their armed forces in terms of funding. Funding is the supply of money or pecuniary resources, as for some purpose. It is the act of providing financial resources usually in the form of money. Funding is necessary for the maintenance of men and materiel in order to provide an enabling environment to maintain optimal operational readiness.
2. The amount spent on defence by the U.S. in 2017 was approximately $610 billion or 15% of the country’s federal GDP or 3.1% of its total GDP. China spent approximately $220 billion in 2017 or 2% of its country’s total GDP on defence. South Africa spent $3.6 billion on defence in 2017 or 1% of its total GDP. Egypt spent $2.7 billion on defence in 2017 or 1.3% of its total GDP. Nigeria, in comparison, spent approximately $1.6 billion on defence in 2017 or 0.4% of its total GDP (Stockholm International Peace Research Institute, 2018). Compared to these other leaders, Nigeria spends far less on its military as a percentage of GDP than they do. Egypt spends more than 4x the percentage of its GDP on defence than does Nigeria. The U.S. spends nearly ten times as much in terms of GDP. South Africa spends more than twice as much of its GDP on defence than does Nigeria and China nearly four times as much. China has a population of 1.3 billion people. The U.S. has a population of 325 million people. Nigeria, by contrast, has 133 million people and is the most populated country in all of Africa (Dagne, 2005). Yet, even with roughly a third of the population of the U.S., Nigeria shows that its defence spending is quite meager by comparison.
3. The capability of a force refers to its degree of combat superiority over the adversary in battle. This capability is driven by 4 components of force structure, modernization, sustainability and readiness. All these components are derivatives of a National Defence Policy (NDP). NDP is an elaborate course of action designed by the government in order to deal with all forms of security threats, actual and potential, internal and external to Nigeria’s national interest. The NDP of nations serves as a framework to guide defence expenditure among other things. In Nigeria, the FGN over the years makes resources available to the NA through annual budgetary allocation. This has enabled the NA to function and maintain platforms capability to carry out its assigned roles, through acquisition of hardware, training and welfare.
4. Nations therefore strive to allocate adequate funds to the defence sector to improve its operational readiness. The level of defence funding is influenced by factors such as state of the economy, nature and severity of threats and structure of the decision making process. According to Stockholm International Peace Research Institute (SIPRI), global recommendation for defence funding is 2 per cent of a nation’s Gross Domestic Product (GDP). This will enable nations attain the level of operational readiness required to contain asymmetric threats that have characterised the post cold war era.
5. Defence is on the exclusive legislative list funded by the FGN. It is the responsibility of the FGN to allocate sufficient financial resources to the NA to ensure adequate funding for the performance of assigned responsibilities as contained in NDP. The NDP stipulates a defence budget of 1.5 to 3 per cent of GDP in line with global recommendation. This has not been complied with leading to inadequate funding and dearth of equipment in the NA thus impinging on National security. The FGN has been funding the Defence sector through several interventions and extra budgetary allocations to carry out assigned roles. Despite all these efforts, the sector is yet to achieve its optimal level of performance. This therefore calls for a realistic funding of the sector to fulfill the objectives of the NDP.
6. The purpose of this paper is to examine the effects of defence funding on the NDP. The paper will discuss an overview of defence funding in Nigeria, effects of defence funding on NDP and challenges mitigating against realistic defence funding. Thereafter, it will look at the defence funding of some selected countries to draw lessons and proffer strategies for realistic funding of NDP. This paper will be limited to the funding mechanism of the NA in the last 10 years. It is assumed that the process of budgeting for NA funds is similar to other Services.
AIM
7. The aim of this paper is to discuss the funding of NDP on the NA with a view to making recommendations.
OVERVIEW OF DEFENCE FUNDING IN NIGERIA
8. Since Nigeria has been fighting Boko Haram in the northern region of the state, its capital expenditure on defence has increased “from over 16 in 2013 to about 30% in 2017” (PRNewswire, 2017). Capital expenditure on defence is expected to continue to increase with the average expenditure sitting at around 26% until 2022. Currently, Nigeria allocates about 36% of its defence budget to the army, 20% to its navy, and 21% to its air force. Nigerian Homeland security has been the recipient of greater funds in recent years, namely because of the increase in terror in the north. From approximately $1 billion in 2013 to $1.5 billion in 2017 to an estimated $3 billion by 2022, Nigeria is spending more and more on security efforts, which include investing in intelligence, surveillance, electronic documents such as e-passports, border security, bio-metric identification systems, and closed circuit television (PRNewsire, 2017). In the past, Nigeria has faced cash crunches that have resulted in a reduction in military expenditure. In the 1980s, Nigeria entered into a Structural Adjustment Program, for instance, which led to a GDP decline and a decline in military spending.
9. As Global Security (2018) points out, sanctions from the international community followed, which further reduced the amount of funds Nigeria could devote to its military, and as engineering support was typically contracted out to international firms, many of Nigeria’s military craft deteriorated until about 2010. Global Security (2018) notes that “in the light of the IMF recommendation that military spending in Africa be reduced to 15 percent of gross domestic product, Nigeria's strength of 150,000 men was recognized as excessive and impossible to maintain.” However, “the budget to administer and maintain such a force is not compatible with the priorities of President Obasanjo's administration, and therefore the Ministry of Defence devised a blueprint to transform Nigeria's armed forces. The plan was to forge a mobile well-equipped, well-maintained and highly motivated force, able to face the challenges of the future and contribute to national development” (Global Strategy, 2018). This plan, though, still requires adequate funding and by that is meant significantly more than is currently allocated to defence. Still, analysts anticipate that over the coming years, Nigeria is expected to increase its military spending. According to PRNewswire (2017), the country is looking at a “total of close to US$9.5 Billion on its defense over 2018-2022, and the country's military expenditure is expected to increase at a CAGR of close to 9% to reach over US$2 Billion by 2022.” Nigeria’s GDP has been shrinking since peaking in 2012—but estimates indicate that GDP should bounce and begin trending upwards once more in the coming years. Trading Economics (2018) provides the consensus view in the chart below:


Nigeria’s GDP is depicted in the chart above, which shows that expectations for the coming years are quite high, with GDP expected to reach all-time highs for the Nigerian economy. With Nigerian being seen as one of the fastest growing economies in the world in recent years, it is recognized as a suitable place for foreign investment (Dokunola, 2016). However, unless a significantly larger share of total GDP is allocated to defence, Nigeria will find itself continually behind the curve with respect to what the international standard of military spending as a percentage of GDP is among the world’s developed countries.

In the chart above, it can be seen that Nigeria’s current military expenditure as a percentage of GDP is at the lowest it has been in 30 years. After peaking in 2002 at 1.5% of GDP, the defence budget has shrunk to under 0.5% of GDP. The Stockholm International Peace Research Institute reports that 2% of GDP should go to military funding—but Nigeria has never been at that level. Moreover, because of corruption in the government, such an allocation would not guarantee that the actual military would benefit, as funds can easily be diverted in a corrupt system.
EFFECTS OF DEFENCE FUNDING ON NDP
10. Recurrent expenditure is one of the biggest issues to have an effect on the NDP. As can be seen below from the 2018 budget for Nigeria, recurrent spending is in itself a major issue. As The Nation (2017) reports, “A substantial part of the recurrent cost proposal for 2018 is for the payment of salaries and overheads in key ministries providing critical public services such as”—
• N510.87 billion for Interior
• N435.01 billion for Education
• N422.43 billion for Defence
• N269.34 billion for Health
With Defence receiving the third largest amount of recurrent spending—just below that of Education—one can see why it is so controversial that expenditure also be allocated for updating and maintaining equipment: to effectively update the Nigerian military would require a significant and exponential increase in funding. Global Strategy (2018) explains how this impacts the NDP: in terms of the problem for just one area of defence—support for the navy—“the twin problems are those of insufficient funds and untimely releases. Beyond acquisition cost of ships, the reality of maintenance to ensure ship availability must be considered in allocation of funds. Typically, 10 percent of acquisition cost is supposed to be allocated to maintenance annually. This is about N50.4 billion of the estimated cost of Nigerian Navy ships put at N504 billion as at 2007. However, in practice, the funds released for maintenance of ships in the Nigerian Navy is very inadequate.”
11. Eze (2011) notes that Nigeria’s defence policy “is yet to properly articulate how the country will attain the independent capacity for deterrence and its employment as a principle of national defence” (p. 123). Okonkwo (2018) adds that “it is unwise to assume that the existing military infrastructure provides sufficient deterrence against potential aggressors, in the absence of a strong and self-propelled indigenous technological and industrial base.” Eze (2011) focuses on the reason for Nigeria’s insufficient funds as being related to the country’s weak economic infrastructure: “Countries with well built defence capabilities have a well-built economic, industrial and technological base to support the defence infrastructure like the armed forces and arms industries” (p. 123). Nigeria’s “weak and royalty oriented economy” lacks a strong industrial base (Okonkwo, 2018)—which is one thing that Nigeria’s leaders have pointed out in recent months and the main reason the country has refrained from ratifying the recent ECOWAS EPA: “Our industries cannot compete with the more efficient and highly technologically driven industries in Europe. We are not enthusiastic about signing the EPA,” Buhari stated (Giles, 2018). The hope of Buhari is that Nigeria can begin to stand on its own two legs and become an industrial powerhouse like other industrialized, developed nations around the world. The problem is that Nigeria’s military cannot wait for this development: it needs proper funding now. Meanwhile the NDP is woefully inadequate to address the funding challenges. As Uzodinma (2015) has noted, the NDP developed in 2006 is in need of review itself: Nigeria has “undergone a lot of transformation in terms of developments as well as security challenges” since the NDP was first released. As the NDP is supposed to provide guidance on short, medium and long term outlooks, and since Nigeria’s economic condition has improved since 2006 while its security footing has deteriorated, there is a need to re-address the NDP.
CHALLENGES MITIGATING REALISTIC DEFENCE FUNDING OF NDP
12. Global Security (2018) states that “one of the contentious provision of National Defence Policy [NDP] is funding. It is very possible to actualize the provision of the NDP, if the government adequately funds the AFN to transform it to the standard required to achieve the NDP.” The NDP pointed out that defence equipment should be updated so that Nigeria’s military can perform the services expected of them. However, obtaining the funding to update equipment is an issue. Even if a broad range from 1.5% to 3% of GDP were to be recommended based on international figures, Nigeria would still fall far short in its current allocation of funds to defence. In order to provide the kind of funding that defence needs in Nigeria, funds would have to be re-directed from other areas, such as education, health, housing, transportation, agriculture and rural development, industry and investment, and construction of roadways. But all of these areas are essential to the overall development of the country, its strengthening, its sustainability, and its long-term goals. Just as defence is not an end in and of itself but rather a means to an end, which is the stability and security of the nation, roads, infrastructure, health, and education are all important aspects of social development that have to be funded and developed as well. It is a matter therefore of establishing priorities. Should Nigeria attempt to update its society before it has secured its borders or eliminated the threat to the North that is Boko Haram? Or should it focus on diverting funds to defence for the short term so as to neutralize the threat currently facing it and put health, education and roadway development on hold for the present? Answering this question is the main challenge that Nigeria’s leaders must face—though it should be remembered that the nation is nothing if not secure.
13. In order to realistically address the challenges facing defence funding in Nigeria, the country’s leaders first have to recognize the importance and primacy of obtaining security and stability in the region before the country focus on rebuilding and investing in infrastructure. The country requires a stronger military than what it currently has and it requires assistance with securing its borders and neutralizing the threat that is Boko Haram. The Boko Haram threat is to some degree being addressed by Nigeria’s collaboration with The Gambia, which, along with other neighboring states, serves as an entry point for Boko Haram in West Africa (Hadebe, 2017)—but more needs to be done. To what extent can Nigeria realistically cover its defence funding gap in order to bring its defences up to par with other countries according to the Stockholm International Peace Research Institute’s recommended funding percentage? This question has to be addressed by Nigerian leaders by reviewing the NDP.
DEFENCE FUNDING OF SOME SELECTED COUNTRIES
14. According to the Congressional Budget Office (CBO), the U.S. military uses models to inform approximately two-thirds of its budget request from Congress (CBO, 2012). The CBO’s graph below indicates the extent to which the U.S. military uses modeling to obtain its funding.

The U.S. uses models for Operating Tempo and Training, which are “models of services’ major training and peacetime deployment activities [that] usually contain a readiness goal for deployable units. Model outputs such as flying hours are multiplied by a projected unit cost” (CBO, 2012, p. 6). Detailed projection models are also used which provide “detailed estimates of demands for products, services, or resources [that] are multiplied by a projected unit cost” (CBO, 2012, p. 6). One example of how a branch of the U.S. military would use a model is the Navy’s Ship Operations model, which is “built on information about the resources used by each ship as it goes through the FRP cycle. The model is used to estimate the cost of preparing ships and training their crews to deploy overseas. Costs include those for fuel, utilities, supplies, equipment, ship administration, and counterterrorism self-defense measures” (CBO, 2012, p. 18). This model can be seen in the graph below.

Comparing Russia’s military defence spending to the U.S.’s, the UK’s and Germany’s reveals the extent to which Russia has pulled ahead of the others. Russia has invested heavily in its defence security by focusing on missiles systems and innovative technology that outpaces what other nations have achieved so far (Cooper, 2016). This can be seen in the chart below, which shows that Russia’s expenditure as a share of GDP now even outpaces that of the U.S.—which is a major reason that Russia’s missile defense and attack capabilities are now considered the world’s best. Russia has placed defence spending as a priority before all else because the country’s leaders (namely Putin) recognize the need to secure the country before revitalizing the country.

The models used by the UK and by Germany are important to consider as well. As Saxi (2017) points out, “at NATO’s 2014 Wales Summit, the UK and Germany unveiled two new initiatives for European defence cooperation, known, respectively, as the Joint Expeditionary Force (JEF) and the Framework Nations Concept (FNC). Both were the result of economic pressures and the need to exercise intra-alliance leadership, but they represented very different approaches to cooperation” (p. 171). These different approaches can be shown in terms of power and authority—as in which state will oversee the implementation of the plan. According to Saxi (2017), “the JEF was to be a UK-led contingency force for short-notice operations, selectively incorporating forces from allies and partners. The FNC sought to coordinate capability development between groups of allies, centred on larger framework nations, to develop coherent capability-clusters available to meet NATO’s force requirements” (p. 171). And while both models put forward different approaches to control, Saxi (2017) also notes that “the common denominator and novelty of the initiatives was the building of forces and capabilities multinationally by having major states act as framework nations for groups of smaller allies” (p. 171). This idea of a common denominator is one that Nigeria could consider as it seeks to implement a model for funding that will allow it to meet its defence funding needs.
15. Nigeria could benefit from the type of model developed by Germany and the UK while also being mindful of the approach used by the Russians, placing emphasis on defence before all else, and using the modeled approach of the U.S. to secure funding from the state. The collaborative approach to modeling used by Germany and the UK could work for Nigeria, especially if Nigerian leaders refuse to budge on increasing the percentage of GDP for defence. More funds would have to come from somewhere then and allies would need to be formed. The “building of forces and capabilities multinationally by having major states act as framework nations for groups of smaller allies” (Saxi, 2017, p. 171) would help Nigeria to reduce the risk of having a funding gap while ensuring that security issues are addressed.
STRATEGIES TO MITIGATE THE CHALLENGES FOR REALISTIC FUNDING OF NDP
16. The issue of the ends, ways and means should be discussed when developing strategies to mitigate the challenges for realistic funding of NDP. The strategies should be SMART (Specific, measurable, achievable, relevant and time bound) and without clear definitions and parameters, a strategy will be ineffective. The end, therefore, that should be considered above all else is the security of the state—which means that the threat of Boko Haram has to be addressed and the borders of the nation have to be better secured. The ways in which this can be achieved are through a better application of defence and security forces, using updated technology such as intelligence, surveillance, electronic documents such as e-passports, border security, bio-metric identification systems, and other types of military defense security investments. The means for this must come by way of cooperation with other states as well as through an increase in funding for defence from Nigeria’s own coffers. Currently, Nigeria receives funding which is less than 0.5% of GDP. Russia, which now has the best defence technology on the planet, by way of contrast has spent nearly 6% of GDP on defence development. Nigeria must resemble Russia in its commitment to defence in order to secure its borders and negate the threat of terror in the North. It must also resemble the UK and Germany in their collaborative model to funding defence, while also resembling the U.S. in its approach to using modeling to secure funding from the state.
17. The appropriate strategy going forward would be to have a specific, measurable, achievable, relevant and time bound plan: for the purposes of bolstering Nigeria’s defence system, the plan should include (a) a provision for obtaining sufficient funding to provide Nigeria’s defence with the technology, personnel, and training needed to confront any threat to the nation’s security, by land, sea and air; (b) a method for measuring the allocation of funding, using a model based on the U.S. approach to modeling as presented by the CBO and on the JAF of the UK and Germany; (c) a process for implementation that can be conducted immediately; (d) funding that meets the needs of each military department, and (e) that is not delayed and does not exceed the time frame of the next two years.
CONCLUSION
18. The security of Nigeria is currently at risk as the state spends so little on its defence and is not able to properly maintain equipment or develop any innovative tools for fighting the threat of terror in the North. The state is focused on turning itself into an industrialized nation, but it must first take steps to avoid losing ground to Boko Haram. The stabilization of society should be a top priority for Nigeria’s leaders and that can only be accomplished through a revision of the NDP.
19. The nations that obtain the most security and stability are the nations that focus the most on defence. Russia has become the world leader in innovative defence technology by allocating more than ten times the percentage of its GDP to defence that Nigeria currently gives. Nigeria must learn a lesson from Putin and adopt a similar position. Defence can be achieved without adequate funding.
RECOMMENDATIONS
20. The NDP must be reviewed. Nigeria must also not wait for itself to become fully industrialized: if it does, it will not have sufficient funds ready to meet defence needs right now. Rather, Nigeria must come to an arrangement with third parties (i.e., foreign investors) to obtain support for defence spending. Nigeria has relied on Western corporations like Lockheed Martin in the past to provide technical support and maintenance, and Nigeria should seek partnerships with the EU and the U.S. or with China so that it can fight Boko Haram in the North and strengthen its defence, security and personnel needs. Nigeria is not strong enough economically to be wholly independent at this time, and though economic independence is ultimately the goal, defence and security should receive priority at the present as there is a clear and present threat that must be addressed.

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