Developing an Original Methodology for Measuring the True Cost of Insecurity in Nigerian States

The cost of insecurity in Nigeria is conventionally measured through direct security expenditure and directly quantifiable losses, but this methodology dramatically understates the total economic burden by excluding indirect effects including investment deterrence, productivity loss, and social capital erosion. This study developed an original methodology for comprehensively measuring the true cost of insecurity in Nigerian states. A methodology development approach employing multi-phase research design was adopted: systematic review of insecurity cost measurement methodologies from the Institute for Economics and Peace, RAND Corporation, and World Bank conflict cost frameworks; empirical testing of candidate measurement approaches across Borno, Rivers, and Lagos States representing distinct insecurity typologies; and expert validation through consultation with 18 economists, security analysts, and policy researchers. Phase two empirical testing developed and applied a True Insecurity Cost Index across the three states incorporating direct costs (security expenditure, medical costs, property loss), indirect costs (FDI deterrence premium, productivity loss, displacement economic cost, informal sector suppression, human capital flight), and social costs (social capital erosion monetisation, mental health burden). Results showed that the True Insecurity Cost Index produced estimates 3.8 to 6.2 times larger than conventional direct cost measurements across the three states. Indirect costs dominated in Rivers State (investment deterrence) while direct and social costs dominated in Borno. The original TICI methodology constitutes a significant contribution to insecurity costing methodology and is recommended for adoption by the National Security Council Economic Assessment Working Group.

Keywords: insecurity cost measurement, True Insecurity Cost Index, methodology, Nigeria, original contribution