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N804bn arms imports spark calls for local production

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Nigeria spent N804.10bn on arms and ammunition imports between 2020 and the second quarter of 2025, according to data obtained from the National Bureau of Statistics.

Despite moves by the government to expand domestic production, recent data revealed that the import bill remains on the rise, raising concerns about foreign exchange depletion and national security dependence on external suppliers.

This came as local manufacturers increased the call for deeper collaboration with the country’s Armed Forces for the production of some arms and ammunition domestically, stressing that this would considerably reduce the huge FX spent on arms imports.

Foreign trade data from the NBS showed that in 2020, Nigeria imported arms and ammunition, including parts, worth N29.24bn. The import bill surged to N72.50bn in 2021 before dropping to N28.24bn in 2022. In 2023, imports jumped again to N127.16bn. By 2024, it rose astronomically to N520.02bn, recording the highest importation of arms and ammunition in the five years.

Between January and June 2025, Nigeria imported arms worth N26.95bn, indicating that the upward trend had not abated. Data showed that in the first quarter of 2025, arms and ammunition imports stood at N22.08bn, with an additional N4.87bn imported in the second quarter. This brought the total to N26.95bn in the first half of 2025 alone.

Official data showed the depth of the surge when compared with the corresponding period of 2024. In H1 2024, Nigeria imported N11.76bn worth of arms and ammunition, split between N10.72bn in Q1 and N1.04bn in Q2. But in the second half of 2024, Nigeria imported arms and ammunition worth N508.25bn. Split between the quarters: in Q3 2024, the country imported N24.40bn, and in Q4 2024, it imported arms and ammunition worth N483.85bn

Stakeholders react

Stakeholders say the persistent rise in arms imports proves that Nigeria’s local defence manufacturing capacity has not hit its stride despite government reforms. President Bola Tinubu, in November 2023, signed the Defence Industries Corporation of Nigeria Act, which repealed previous provisions and sought to create a robust military-industrial complex through research, innovation, and private sector partnerships.

Two years into the implementation of the DICON Act 2023, reforms are off to a slow start. The import figures show that foreign dependence remains dominant.

Industry players, including the Manufacturers Association of Nigeria and the National Association of Small-Scale Industrialists, Centre for the Promotion of Private Enterprise, argue that heavy imports drain scarce foreign exchange. In separate interviews with The PUNCH, these stakeholders noted that buying weapons abroad often exposes Nigeria to political pressures from supplier countries, a factor that undermines the country’s sovereignty.

Local manufacturers are calling for stronger collaboration with the Defence Industries Corporation of Nigeria. They insist that without scaling up indigenous production, the country will continue to burn scarce resources on foreign procurements while failing to unlock the economic opportunities in defence manufacturing.

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MAN seeks inclusion

The Director-General of MAN, Segun Ajayi-Kadir, revealed that the body was already engaging DICON to expand local defence production. He said, “We are in talks with DICON. And in MAN, we have members who manufacture military hardware. Collaboration is only a foregone conclusion. It would be nice to see private and public sector partnerships flourish in this regard, because this is a strategic as well as an economic game changer for Nigeria.”

Ajayi-Kadir stressed that DICON, once moribund, had shown renewed dynamism since its revival under the new law. He observed that a functional defence industry would address two strategic concerns: national security and economic stability.

He explained that local arms production would shield the country from external embargoes, strengthen territorial defence against insurgency, and save scarce foreign exchange. “There’s no doubt that investing in local arms and ammunition manufacturing would significantly improve the economy overall, in the sense that it is not only in terms of boosting our security,” he declared.

MAN’s DG added that Nigeria ought to pursue arms self-reliance for external sovereignty and internal security. “There was a time in this country that some modern nations refused to sell arms to us,” Ajayi-Kadir said.

“Self-sufficiency, or reduction in dependence on imported arms, will greatly enhance the capacity to defend the territorial integrity and to protect the lives of citizens, particularly now that we are having insurgency and activities of non-state actors. In terms of securing lives and preserving foreign exchange, local production will greatly help.”

Ajayi-Kadir argued that foreign exchange saved from reducing arms imports could be channelled into raw materials, spare parts, and other productive inputs. He added that indigenisation of defence technology could also position Nigeria as an exporter in the medium term. “It will also be able to get us to innovate in a way that we can have military hardware and technologies that are indigenous to us, which we could even export. It will deepen our economic stability and progression,” he maintained.

NASSI, CPPE speak

The National Vice President of NASSI, Segun Kuti-George, linked the ballooning import bill to weak local research and insufficient industrial participation. He noted that while small-scale players had yet to feature prominently in arms production, they could play a critical role if given access to science-driven innovation.

Kuti-George said, “Arms are generally used for defence. And when you have an excess of it, you export. When you are manufacturing locally, you are saving foreign exchange. God help you if your supplier is a friend of your attacker. Encouraging local manufacturing is very important.”

He urged Nigeria to learn from countries that deliberately invest in research and innovation to address security vulnerabilities. He cited Lithuania’s adoption of drone training from basic school and the emergence of private drone manufacturers in Abuja as examples of what deliberate research could achieve.

“We need to pay more attention to science and research. That is the only way forward. Let’s teach science. Let’s teach research in our universities. Let’s stop all these ideas of people just writing pieces and filing them away. We are living in a practical world now,” NASSI’s VP said.

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Kuti-George advised that graduates of engineering and science in Nigeria should be producing machines and prototypes as part of their final projects, rather than submitting theoretical dissertations.

He stressed that linking education to practical research was key to reviving the industrial base. “Where is the machine that you are producing? Are you able to produce a garri frying machine? Are you able to produce something practical? That is the way. We need to do a serious review of our educational system,” he cautioned.

Kuti-George welcomed the government’s recent push on vocational colleges but called for a deeper emphasis on applied research to complement military innovation.

Director of the Centre for Promotion of Private Enterprise, Dr Muda Yusuf, affirmed Nigeria’s need to be self-reliant in defence manufacturing and avoid heavy importation of arms and ammunition. He welcomed the local manufacturers’ quest for deepening their partnership with the government as “a very good thing, and it’s something to be commended.”

He emphasised local production as the path to internal security, stating, “Local production is the way to go anytime and any day. It is good for self-reliance and for internal security. When it comes to security matters, the less import-dependent a country is, the better. Look at the biggest or the strongest countries in the world, they don’t rely on imports for their security apparatus or for their security equipment.”

Yusuf concurred with MAN that an increase in local manufacturing of defence equipment would help to reduce forex outflows and ensure sovereignty. “Building our domestic capacity in arms manufacturing helps with retaining foreign exchange and makes us a lot more secure, a lot more confident as a country, so that if we have security challenges, we can handle them by ourselves without depending on third parties.”

He welcomed the revamping of DICON, adding, “Those who moved in the government to set up a Defence Industrial Corporation of Nigeria, in Kaduna, had foresight. They had the foresight, and the whole idea was to ensure that much of our security equipment, arms, and ammunition are produced here.”

“It’s just that we didn’t follow through,” Yusuf noted, and decried the poor management in the past. “Once, we had to depend on a particular country for some arms or aircraft at the peak of the Boko Haram crisis, and they were giving us conditions before they could sell it to us. They gave us all sorts of conditions that were not properly aligned with our security strategy.”

DICON reforms

The Defence Industries Corporation of Nigeria was established in 1964. Under the 2023 Act signed by President Tinubu, DICON is repositioned. The new law empowers the state-controlled firm to operate subsidiaries, establish a Defence Industry Technology, Research, and Development Institute, and provide a financing architecture to attract private capital into the sector.

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Following President Tinubu’s assent, DICON signed memoranda of understanding with several firms in 2024, including X-Shield Solution Company Limited, Buckler Systems Limited, and Epsilon Bronberg Innovation Limited. The agreements were designed to build a military-industrial complex through public-private partnerships.

In July 2025, DICON announced a $2bn partnership with SP Offshore Nigeria Limited to expand local manufacturing of defence hardware.  Director-General of DICON, Major General Babatunde Alaya, said the partnership aligned with the government’s projection to achieve self-sufficiency in defence manufacturing by 2027. “This partnership will achieve the Federal Government’s projection of achieving self-sufficiency in defence manufacturing while reducing foreign importation by the year 2027,” he stated.

Similarly, the Managing Director of DICON Grey Insignia, Bem Garba, reportedly affirmed that the new law would directly impact the naira by reducing dollar demand for arms imports. “By localising production, we can retain more of our FX reserves and reduce the demand for dollars in the defence sector, easing pressure on the exchange rate. As the industry matures, Nigeria can position itself as a regional defence supplier, earning FX through exports,” he said.

Balancing security

Stakeholders argue that local defence manufacturing is not merely an economic policy but also a strategic necessity. With insecurity ranging from insurgency in the North-East to banditry in the North-West and kidnapping in the South, these stakeholders have cautioned that dependence on foreign arms is a dangerous liability.

Ajayi-Kadir warned that the country’s fragile foreign reserves should not be further eroded by massive import bills. He said, “We have scarce resources that we should have used to buy raw materials, spare parts, and machines that are not available locally for production, but we end up using them to buy ammunition. I believe this is both for a strategic purpose as well as for economic purposes.”

Kuti-George also emphasised that the more Nigeria invests in local innovation, the more it could reduce reliance on hostile suppliers. “If your supplier is a friend of your attacker, it now becomes an issue of who is the highest bidder. So, encouraging local manufacturing is very important,” he said.

Experts say the path to a self-sufficient defence industry will require more than legislation. The local defence industry needs stronger funding for research, stronger collaboration with private manufacturers, and reforms in science education.

For MAN, the next step is a deeper integration of its members into DICON’s supply chain. For NASSI, the priority is building a pipeline of innovators through vocational and research-based education. For DICON, it is expanding partnerships and ensuring that promised targets, such as the 2027 self-sufficiency goal, are met.

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Revenue boom: World Bank faults states’ spending priorities, read full details

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The World Bank has criticised the spending priorities of Nigerian state governments, warning that increased revenues following recent economic reforms have not translated into proportionate investments in education, healthcare and social protection.

The global lender observed that although states had increased spending on essential public services, investments in transport infrastructure had grown considerably faster, even in states with poor human development indicators.

A Senior Economist at the World Bank Nigeria Office, Gloria Joseph-Raji, raised the concerns on Tuesday in Abuja during the launch of BudgIT’s 2026 State of States Report, themed ‘From Allocation to Impact: Rethinking State Spending Priorities.’

She said, “Spending on education, health, and social protection has also risen substantially, but it has not kept pace with the rapid growth in transport infrastructure spending, even in states with weaker human capital outcomes.”

Joseph-Raji explained that the bank’s October Nigeria Development Update, which examined budget implementation reports from all 36 states, found that governments had expanded transport infrastructure and reduced their debt burdens, particularly domestic debt, following increased fiscal allocations.

She attributed the revenue growth to petrol subsidy removal, exchange rate unification and improvements in tax administration since 2023, alongside federal intervention funds and the settlement of longstanding obligations to states.

According to her, the additional resources have enabled states to meet salary obligations and created opportunities for improved public service delivery.

However, she warned that excessive dependence on Federation Account allocations continued to expose state finances to fluctuations in federally shared revenue.

“In 2025, federation transfers accounted for more than three-quarters of revenue in all but a handful of states,” she said.

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She disclosed that federation transfers accounted for 73 per cent of aggregate state revenues between 2021 and 2025, excluding Lagos, while internally generated revenue was sufficient to cover recurrent expenditure in only two states.

Joseph-Raji noted that states received 26.72 per cent of net Federation Account revenues and now received 55 per cent of Value Added Tax revenue under the revised sharing formula.

Meanwhile, BudgIT’s Country Director, Vahyala Kwaga, disclosed that aggregate revenue across the 34 states covered in its comparative analysis rose from N4.99tn in 2022 to N15.53tn in 2025, representing an increase of N10.54tn.

He said FAAC allocations increased by more than 232 per cent, from N3.43tn to N11.38tn during the period.

Despite the revenue growth, Kwaga disclosed that the states had spent only N8.60tn, representing 24.4 per cent of their combined N35.22tn approved budgets, by June 2026.

“We must also examine how effectively they deploy the resources available to them, what they prioritise and whether their spending is delivering the outcomes that citizens need,” he said.

He explained that BudgIT had revised its assessment methodology to place greater emphasis on spending in education, healthcare, agriculture, water and sanitation, alongside revenue performance and debt sustainability.

Presenting the report, BudgIT’s Head of Research and Policy Advisory, Adejoke Akinbode, disclosed that total debt across the 35 states assessed increased by 10.41 per cent, from N10.57tn in 2024 to N11.67tn in 2025.

She identified Lagos as the most indebted state, with N2.9tn, while Osun spent N100.17bn servicing debt, equivalent to 28.6 per cent of its revenue.

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Akinbode said Lagos ranked first in overall fiscal sustainability, followed by Enugu, Bayelsa, Delta and Kebbi, while Cross River ranked last. Rivers was excluded because of inadequate fiscal data.

She urged states to reduce administrative costs, strengthen revenue collection and link borrowing to productive investments.

In her keynote address, an economist and lecturer at Amadeus University, Abia State, Dr Iboro Nelson, argued that rising government revenues had failed to compensate households for the economic hardship associated with recent reforms.

She disclosed that states collectively budgeted N1.32tn for healthcare in 2024 but spent N816.64bn, while education expenditure stood at N1.61tn against N2.41tn budgeted.

According to her, average annual spending per resident amounted to N3,483 on healthcare and N6,981 on education, equivalent to approximately N290 and N582 monthly, respectively.

“This is actually not fiscal space, but fiscal illusion,” she said.

Nelson blamed weak budget implementation, unrealistic expenditure projections, overlapping projects and excessive recurrent costs for the limited developmental impact of rising allocations.

Also speaking, a Programme Manager at the Ford Foundation’s West Africa Office, Joy Ehinor-Esezobor, urged governments to measure fiscal success by improvements in citizens’ lives rather than revenue growth or rankings.

“The ultimate measure of success should not simply be a better fiscal ranking, but better services and improved living conditions,” she said.

The programme is seeking to establish a framework for developing Nigeria’s underutilised small hydropower resources through private investment and public-private partnerships.

Source: punchng.com

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Otti woos US investors to Abia

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Governor Alex Otti of Abia State has concluded plans to bring investors, business leaders, policymakers, development partners, diplomatic representatives and entrepreneurs to the state to explore investment opportunities and strengthen commercial relations between Africa and the United States.

In a statement he signed and issued to newsmen on Sunday, the Chief of Staff to the Governor, Pastor Caleb Ajagba, disclosed that the Abia State Government had unveiled plans to attract American and other international investors to the state through the 2026 edition of the African Diaspora Conference and Expo, AFRICANDO, scheduled for this month.

Ajagba said, “AFRICANDO is a platform for translating international economic engagement into concrete investments and commercial partnerships. The state government is working with the organisers to ensure that the conference goes beyond speeches and networking to facilitate transactions, business agreements and sustainable investment.”

According to him, the 2026 edition, with the theme, “Deepening U.S.–Africa Commercial Ties in the Era of AfCFTA,” would connect investment opportunities in Abia and other African markets with American capital, technology, expertise and international distribution networks.

He added, “The African Continental Free Trade Area, AfCFTA, presents opportunities for African businesses to expand beyond their domestic markets, while international partnerships could help them improve production capacity and competitiveness.

“Abia is strategically positioned to benefit from the initiative because of its manufacturing and entrepreneurial base, particularly in Aba, which is known for indigenous manufacturing, commerce and craftsmanship.”

Ajagba added that Otti’s administration “is investing in infrastructure, strengthening public institutions and improving the business environment to position the state as a destination for private investment.”

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He explained that international delegates and prospective investors would be encouraged not only to attend conference sessions but also to visit strategic economic locations, manufacturing clusters, enterprises and government-backed projects to assess investment opportunities firsthand.

He said the approach was intended to give participants a practical understanding of the state’s economic potential and create opportunities for direct engagement with local businesses and relevant government agencies.

“AFRICANDO 2026 is not exclusively an Abia event. It is an international economic platform being hosted in Abia State,” he continued.

He listed agriculture and agro-processing, manufacturing, consumer goods, energy, financial services, healthcare, transportation and logistics, science and technology, artificial intelligence and emerging technologies among the sectors expected to receive attention.

A major feature of the conference, he said, would be a structured Deal Room and Investment Marketplace, where investment-ready projects from Abia and participating businesses would be presented to prospective investors.

Source: punchng.com

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Personal loans hit new high N1.99tn

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Nigerians’ outstanding personal loans increased by an estimated N58.5bn in the second quarter of 2026, reaching N1.99tn at the end of June, as households faced persistent inflationary pressures and high borrowing costs.

An analysis by The PUNCH of the Central Bank of Nigeria’s Second Quarter 2026 Economic Report showed that personal loans rose by 3.03 per cent from approximately N1.93tn recorded at the end of March.

The development came as total consumer credit increased by 3.26 per cent to N3.17tn from N3.07tn in the preceding quarter, representing an increase of about N100bn within three months.

The CBN stated, “Consumer credit outstanding increased by 3.26 per cent to N3.17tn, from N3.07tn in the preceding quarter. The increase reflected growth in both retail and personal loans, which rose by 4.10 per cent and 3.03 per cent, respectively.”

According to the report, personal loans accounted for 62.87 per cent of total consumer credit, while retail loans constituted the remaining 37.13 per cent.

This means that nearly N63 out of every N100 owed by consumers to financial institutions was classified as personal borrowing, highlighting its dominance in the consumer credit market.

Retail loans also increased by approximately N46.5bn to N1.18tn at the end of June, compared with an estimated N1.13tn in March, representing quarterly growth of 4.10 per cent.

Although retail loans recorded a faster percentage increase, personal loans contributed more to the outstanding stock of consumer credit.

The increase in personal borrowing occurred amid renewed inflationary pressures, which continued to affect household purchasing power.

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The CBN reported that headline inflation rose to 15.91 per cent in June 2026 from 15.38 per cent in March, reflecting increases in the prices of essential goods and services.

The report attributed the development largely to higher energy and commodity prices associated with geopolitical tensions in the Middle East, which increased production and transportation costs.

These conditions placed additional pressure on household expenditure, particularly for consumers whose incomes had not increased sufficiently to offset rising prices.

However, the report did not establish whether the increase in personal loans was driven primarily by household financial difficulties, consumption needs or improved access to credit.

The growth in consumer borrowing also occurred despite elevated lending rates in the banking sector.

 

 

According to the CBN, the average prime lending rate declined marginally to 19.01 per cent in Q2 from 19.37 per cent in the preceding quarter.

In contrast, the maximum lending rate increased slightly to 34.37 per cent from 34.34 per cent, indicating that borrowing remained expensive for some categories of bank customers.

Although these rates reflect broader banking sector lending conditions rather than specific personal loan charges, they provide an indication of the financing environment confronting borrowers.

A recent report ‘Enhancing Financial Inclusion & Advancement’ noted that four in every 10 Nigerians borrowing from formal financial institutions now take loans mainly for consumption and coping needs, as rising financial pressures increasingly push credit away from productive activities.

The ‘2026 Access to Financial Services in Nigeria Survey’ revealed that 40.8 per cent of formal borrowers used loans for coping and consumption, up sharply from 31.7 per cent in 2023.

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The 9.1 percentage-point increase made coping and consumption the largest purpose of formal credit, overtaking productive enterprise borrowing, which fell from 40.2 per cent to 34.3 per cent during the same period.

Borrowing for household assets also declined from 25.2 per cent to 23.4 per cent. The report warned, “Coping/consumption purposes rose from 31.7 per cent to 40.8 per cent; productive purpose fell from 40.2 per cent to 34.3 per cent. We need to ensure that credit builds productive capacity and does not produce distress.”

Formal credit use increased from six per cent of adults in 2023 to 10 per cent in 2026, with about 11.9 million Nigerians borrowing from regulated providers. When informal sources were included, 36 per cent of adults had access to some form of credit.

Credit use among informally employed Nigerians tripled from five per cent to 15 per cent, while borrowing among people aged 18 to 35 rose from four per cent to 10 per cent. Business owners recorded an increase from four per cent to 10 per cent, while farmers rose from two per cent to six per cent.

Source: punchng.com

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