Realistic Defence Funding for Nigeria's National Defence Policy

Introduction

The need to ensure adequate security for the wellbeing of citizens has been the objective of nations since the formation of nation-states. Nations therefore ensure the provision of adequate resources for their armed forces in terms of funding. Funding is the supply of money or financial resources for a designated purpose — it is the act of providing capital, usually in the form of money, that is necessary for the maintenance of personnel and materiel in order to create an enabling environment for optimal operational readiness.

The amount spent on defence by the United States in 2017 was approximately $610 billion, or 15% of federal expenditure and 3.1% of total GDP. China spent approximately $220 billion in 2017, equivalent to 2% of its GDP. South Africa spent $3.6 billion, or 1% of its GDP, while Egypt spent $2.7 billion, or 1.3% of its GDP. Nigeria, by comparison, spent approximately $1.6 billion on defence in 2017 — just 0.4% of its total GDP (Stockholm International Peace Research Institute, 2018). Egypt devotes more than four times Nigeria's GDP share to defence; the United States spends nearly ten times as much as a proportion of GDP. South Africa allocates more than twice Nigeria's share and China nearly four times as much. China has a population of 1.3 billion and the United States 325 million, while Nigeria has approximately 133 million people and is the most populous country in Africa (Dagne, 2005). Even at roughly a third of the United States' population, Nigeria's defence spending remains meager by international comparison.

The capability of a force refers to its degree of combat superiority over an adversary in battle. This capability is driven by four components: force structure, modernization, sustainability, and readiness — all of which are derivatives of a National Defence Policy (NDP). The NDP is an elaborate course of action designed by the government to address all forms of security threats, actual and potential, both internal and external to Nigeria's national interest. A nation's NDP serves as a framework to guide defence expenditure, among other things. In Nigeria, the Federal Government of Nigeria (FGN) makes resources available to the Nigerian Army (NA) through annual budgetary allocation, enabling the NA to maintain platform capability for its assigned roles through hardware acquisition, training, and personnel welfare.

Nations strive to allocate adequate funds to the defence sector to improve operational readiness. The level of defence funding is influenced by factors such as the state of the economy, the nature and severity of threats, and the structure of the decision-making process. According to SIPRI, the global recommendation for defence funding is 2% of a nation's Gross Domestic Product (GDP) — a level that would enable nations to attain the operational readiness required to contain the asymmetric threats that have characterized the post-Cold War era.

Defence is on the exclusive legislative list and is funded by the FGN. It is the FGN's responsibility to allocate sufficient financial resources to the NA to ensure adequate funding for the performance of its assigned responsibilities as contained in the NDP. The NDP stipulates a defence budget of 1.5 to 3% of GDP in line with the global recommendation. This target has not been met, leading to inadequate funding and a dearth of equipment in the NA, thereby undermining national security. The FGN has sought to address the shortfall through several interventions and extra-budgetary allocations. Despite these efforts, the defence sector has yet to achieve its optimal level of performance, which calls for a more realistic funding approach to fulfill the objectives of the NDP.

The purpose of this paper is to examine the effects of defence funding on the NDP. It discusses an overview of defence funding in Nigeria, the effects of that funding on the NDP, and the challenges militating against realistic defence funding. It then examines the defence funding approaches of selected countries to draw lessons and propose strategies for realistic NDP funding. The paper is limited to the funding mechanism of the NA over the past ten years, and it is assumed that the budgeting process for NA funds is similar to that of the other Services.

Aim: The aim of this paper is to discuss the funding of the NDP as it relates to the NA, with a view to making recommendations.

Overview of Defence Funding in Nigeria

Since Nigeria has been fighting Boko Haram in the northern region of the country, 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 rise, with average expenditure projected at around 26% through 2022. Currently, Nigeria allocates approximately 36% of its defence budget to the army, 20% to the navy, and 21% to the air force. Nigerian homeland security has received greater funding in recent years, largely because of the escalating threat of terrorism in the North. From approximately $1 billion in 2013 to $1.5 billion in 2017 and an estimated $3 billion by 2022, Nigeria is spending progressively more on security efforts, including investments in intelligence, surveillance, electronic documents such as e-passports, border security, biometric identification systems, and closed-circuit television (PRNewswire, 2017).

In the past, Nigeria has faced severe cash crunches that resulted in reductions in military expenditure. In the 1980s, Nigeria entered into a Structural Adjustment Program, which led to a GDP decline and a corresponding decline in military spending. As Global Security (2018) notes, international sanctions followed, which further reduced the funds Nigeria could devote to its military. Because engineering support was typically contracted out to international firms, much of Nigeria's military equipment deteriorated until around 2010. Global Security (2018) notes that "in 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." Nevertheless, "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 still requires adequate — and significantly increased — funding. Analysts anticipate that Nigeria will increase its military spending in the coming years. 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 declined from its 2012 peak, but estimates indicated that GDP would recover and trend upward once more. With Nigeria having been recognized as one of the fastest-growing economies in the world in recent years, it is seen as a suitable destination for foreign investment (Dokunola, 2016). However, unless a significantly larger share of total GDP is directed to defence, Nigeria will remain perpetually below the international standard for military spending as a percentage of GDP. Nigeria's current military expenditure as a share of GDP is at its lowest point in 30 years — after peaking at 1.5% of GDP in 2002, the defence budget has shrunk to under 0.5%. Moreover, because of corruption in government, even a larger allocation would not guarantee that the actual military would benefit fully, as funds can be diverted in a corrupt system.

Effects of Defence Funding on the NDP

Recurrent expenditure is one of the most significant factors affecting the NDP. As reported by The Nation (2017), a substantial part of the recurrent cost proposal for the 2018 budget went to payment of salaries and overheads in key ministries providing critical public services, including:

• ₦510.87 billion for Interior
• ₦435.01 billion for Education
• ₦422.43 billion for Defence
• ₦269.34 billion for Health

With Defence receiving the third-largest share of recurrent spending — just below Education — the controversy surrounding additional capital expenditure for equipment updates becomes clear. To effectively modernize the Nigerian military would require a significant and exponential increase in total funding. Global Strategy (2018) illustrates the impact on the NDP through the example of naval support: "The twin problems are those of insufficient funds and untimely releases. Beyond the acquisition cost of ships, the reality of maintenance to ensure ship availability must be considered in the allocation of funds. Typically, 10 percent of acquisition cost is supposed to be allocated to maintenance annually. This amounts to about ₦50.4 billion of the estimated cost of Nigerian Navy ships put at ₦504 billion as at 2007. However, in practice, the funds released for maintenance of ships in the Nigerian Navy are very inadequate."

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) attributes Nigeria's insufficient funding partly 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, resource-oriented economy lacks a strong industrial base (Okonkwo, 2018) — a shortcoming acknowledged by national leaders and a key reason the country has refrained from ratifying the ECOWAS Economic Partnership Agreement. "Our industries cannot compete with the more efficient and highly technologically driven industries in Europe. We are not enthusiastic about signing the EPA," stated President Buhari (Giles, 2018).

The aspiration to become an industrial powerhouse is understandable, but Nigeria's military cannot wait for that long-term development: it needs proper funding now. Meanwhile, the NDP itself is woefully inadequate to address current funding challenges. As Uzodinma (2015) has noted, the NDP developed in 2006 is in need of review: Nigeria has "undergone a lot of transformation in terms of developments as well as security challenges" since the NDP was first released. Because the NDP is supposed to provide guidance on short-, medium-, and long-term outlooks — and because Nigeria's economic conditions have shifted while its security situation has deteriorated — there is a pressing need to re-examine and revise the NDP.

Conclusion and Recommendations

The security of Nigeria is currently at risk. The state spends so little on defence that it is unable to properly maintain existing equipment or develop innovative tools for addressing the threat of terrorism in the North. Although Nigeria is focused on developing into an industrialized nation, it must first take decisive steps to avoid losing further ground to Boko Haram. The stabilization of Nigerian society should be a top priority for the country's leaders, and that can only be accomplished through a comprehensive revision of the NDP.

The nations that achieve the greatest security and stability are those that prioritize defence spending. Russia has become a world leader in innovative defence technology by allocating more than ten times Nigeria's current GDP percentage to its military. Nigeria must learn from this example and adopt a comparable commitment. Defence cannot be achieved without adequate funding.

On the basis of the foregoing analysis, the following recommendations are made:

The NDP must be reviewed as a matter of urgency. Nigeria must not wait until it becomes fully industrialized, as delay will leave it without sufficient funds to meet defence needs in the near term. Instead, Nigeria must reach arrangements with third parties — including foreign investors and allied states — to obtain support for defence spending. Nigeria has relied on Western corporations such as Lockheed Martin in the past for technical support and maintenance, and it should actively seek partnerships with the EU, the United States, or China to fight Boko Haram in the North and strengthen its defence, security, and personnel capabilities. Nigeria is not yet strong enough economically to be wholly self-sufficient in defence, and though economic independence remains the ultimate goal, defence and security must receive priority at the present moment given the clear and present threat the country faces.

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