05 September 2023

The Economic Cost of Conflict in North East Nigeria

The United Nations Children’s Fund (UNICEF) commissioned a research study to estimate the economic cost of the conflict in North East Nigeria, with a specific focus on violence and grave violations against children. The direct effects of conflict, in terms of death and injury, loss of livelihoods, displacement and damage to infrastructure, are transformed into long-term economic impacts. This is because these impacts reduce the rate of economic growth for the country affected by conflict relative to what it might have been, had conflict not occurred. This study provides a quantitative estimate of the economic cost that arises from violence and grave violations. The study found that, for the duration of the conflict, cumulative losses (i.e., the losses that build up each year that the economy is damaged) were around US$100 billion. The monetary measures are an indicator of the lost development opportunities suffered as a result of the conflict. Even in an optimistic outlook, it will take time for the conflict to be resolved and for life and the economy to return to normal. In considering a situation in which the effects of the conflict gradually decrease over a 10-year period, the study found that substantial impacts will still be generated during this time, leading to cumulative losses in the region of US$150–200 billion in total over that period. The impacts of conflict are not confined to the regions that experience these most acutely. Nigeria as a whole, is worse off as a result of the conflict.  Given Nigeria’s economic size relative to the rest of the region, slower growth in the country may have broader regional spillover effects. That is, regional growth is likely to be lower than in a counterfactual case in which Nigeria was free of conflict.