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ABSTRACT
This study examined the impact of insecurity on economic growth in Nigeria using the annual time series data for the period 1991-2022. The main objective of this research work is to examine the impact of insecurity on economic growth in Nigeria.
The economic growth model proposed by Barro and Sala-i-Martin (1995) is employed for the study. The variables considered are Real Domestic Product which is the dependent variable, government expenditure on defence, government expenditure on insecurity, unemployment rate and inflation rate as independent variables. Augmented Dickey-Fuller (ADF) test was used to test for the stationary of the variables. The variables were stationary at levels and at first differencing. The ARDL bound test for co-integration was used to establish if the stationary variables are co-integrated in the long run. Further, ECM is employed to correct any form of disequilibrium in the short run. The result of stationarity and diagnostic tests reveals that the model is well specified and could be used for policy analysis. The analysis was based on data extracted from Central Bank of Nigeria (CBN) statistical bulletin and World Development Indicators (WDI).
The findings shed light on the complex interplay of economic variables and their impact on economic growth in Nigeria, both in the short term and over extended period. The result of the analysis shows that all the variables except government expenditure on insecurity were statistically significant at 5% level in the long run. The results therefore reveal that there is, overall, a negative relationship between insecurity and economic growth. The study suggests that policymakers and stakeholders must adopt a holistic approach that considers both immediate and long-term consequences when addressing insecurity’s economic ramifications. The study’s robust diagnostics lend credibility to its conclusions, providing valuable insights for policymakers and researchers alike.
