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1.1 Background of the study

      The need for peace accounting arose in order to estimate the cost of peace enthronement. It is the systematic according and ascertainment of the cost of peace keeping .When the impact is measured on the economic development of the nation, it is believed that it will enhance government ability to act proactionly in developing international and national policies for peacefulness. A considerable volume of literature has already attributed part of the economic failure of the developing countries to the prevalence of conflict in these regions. Enough evidence has been shown by previous studies to convince one that the prevalence of conflict in developing countries could explain a greater part of its current economic situation because meaningful economic development cannot take place without peace [1]. [2], stated that the countries of Sub-Saharan Africa, including Sierra Leone, Ivory Coast, Liberia and so many others are a volatile mix of insecurity, instability, corrupt political institutions and poverty. However, it was observed that so far, it is the corrupt political institutions and particularly political corruption that causes or worsens poverty (the lack of basic needs) that leads to instability in Africa. Conflicts in most African nations are caused by the combination of poverty and weak states and institutions, and these have had a devastating impact on Africa’s development. Contributing on the devastating effect of conflict on most African countries, [3], discloses that the costs of conflicts in Africa in terms of loss of human life and property, and the destruction of social infrastructure are enormous. Hundreds of thousands of people have been killed in many of the countries in which the conflicts occur. Many others have also suffered and continue to suffer untold psychological trauma associated with conflicts. Once conflict occurs, scarce resources are inevitably diverted to the purchase of military equipment at the expense of socio-economic development. Using the conflict perspective, [4], examined the recovery from civil war but also considered the processes by which the economy is damaged during conflict; his study concluded that conflict is a devastating phenomenon likely to have large effects on both the level and composition of economic activity. He further noted that during conflicts, GDP per capita declines at an annual rate of 2.2% relative to its counterfactual. Considering that Africa had 51% of minor conflicts, 38% of intermediate conflict and 53% of war out of all global conflicts and wars during the period 1989 to 2000, there is sufficient reason to believe that the presence of conflict explains a greater part of its economic situation. Over the last 40 years nearly 20 African countries (or about 40% of Africa south of the Sahara) have experienced at least one period of conflict [5]. Some conflicts, like violence in Darfur, have been of high intensity, however, it was observed that there are countless smaller conflicts, such as those between herders and cultivators that are to be found in many parts of Africa like the recurring conflict in Jos, Plateau state of Nigeria where fulani herders keep attacking villagers; this type of intermediate conflicts are no less vicious. Violence from these intermediate conflicts also causes as many deaths in Africa as do diseases. The degree of  human loss resulting from localised conflicts is devastating, since many are even sent to a ‘state of limbo’. Millions of lives have been lost as a result of ‘localised’ conflict in Nigeria; for instance, at least 10,000 people lost their lives between 1999 and 2003, and an estimated 800,000 were internally displaced. More people have been forced to flee their homes in Africa than anywhere else in the world; many ending up in the slums of already overcrowded cities and towns. Malnutrition and disease has been on the increase; those who suffer most are the poor and the vulnerable. War and conflicts does not only harm people, it also destroys infrastructure such as roads, bridges, farming equipments, telecommunications, as well as water and sanitation systems. The argument in some quarters is  that the means by which conflicts are sustained implies more harm to the economy . In the past, possible sources of conflict finance have been foreign governments, natural resources and donations from a Diaspora population. In order to finance their operations, rebels can also use kidnappings-for-ransom, extortion, and (less frequently) robberies like the Niger delta scenario in Nigeria, the Libya case and most recent south sudan case. However, much stronger evidence emerges from the analysis of natural resources as a source of finance. There is strong case study evidence that countries with a high share of natural resources in their exports are more likely to experience a war because resources such as diamonds, timber and crude oil can be looted and used to finance the war, noted that cross country regressions provide strong evidence to support causal link between natural resources and the risk of conflict. There is also a wealth of evidence from case studies on the importance of Diasporas in the financing of conflicts. It is evident that spill over effects of conflict can be physical; bombs have been known to cause destructions beyond the borders in which they are used. These might destroy valuable physical capitals like schools, and so forth in neighbouring states or countries. A nearby civil war may lead to collateral damage from battles close to the border which destroy infrastructure and capital. Further, the displacement of people within border regions is also not uncommon in states or countries that share borders with conflict-ridden countries. [8], showed that conflict can lead to under-exploitation of renewable natural resources and over-exploitation of resources with negative future externalities. This might exert pressure on urban population as the attraction is normally towards the bigger cities. However, a global statistical analysis of the onset of civil wars suggests that Africa has experienced more civil wars mainly because the economic circumstances, low income, low growth and high dependence on natural resources, have made wars inevitable.

1.2 Statement of the problem

 It is no doubt that peace frees up resources for productive activities which would have otherwise been diverted to controlling or creating violence. On the other hand, violence and conflict could have much negative impact on many aspects of life such as education, personal safety and health, commerce and trade, personal productivity, human wellbeing, economic development and growth and subjective happiness. With the number of violence experienced so far in Nigeria and new ones developing such as the boko haram insurgency which has crippled economic, academic and other activities in the northern region of the country, one wonders if business leaders, religious leaders and government are not aware of the extent of business opportunities forgone by continuous violence both nationally and internationally. Hence, the need to examine the interface between economic development and the cost of conflict in Nigeria is not out of place. However, this present study aims at examining the impact of cost of conflict on economic development in the Nigerian. In addition, this study examined the following objectives;  the extent to which the nation’s economic policies and implementations upheld drivers of peace as the cost of investing in proactive peace creation is minimal compared to the lost potentials caused by violence, whether the nation’s peacefulness enhances the size of its retail sector, stock market, the impact of conflict on the economic development of Nigeria, the contribution of social values on conflict management and the impact of societal structures on conflict management in Nigeria.

1.3 Definition of terms

Conflict: A serious disagreement or argument, typically a protracted one.

Conflict resolution: Conflict resolution involves the reduction, elimination, or termination of all forms and types of conflict

Economic development: Economic development, the process whereby simple, low-income national economies are transformed into modern industrial economies

1.4 Literature review

      According to [11], peace is a dynamic social process in which justice, equity and respect for basic human rights are maximized and violence both physical and structural is minimized. Peace is concerned with the elimination of violence where violence is an act or process which impedes people from realizing their potentials. Negative peace refers to the absence of direct violence that causes physical harms and positive peace is the absence of structural violence manifested as the uneven distribution of power and resources. Said in another way, it is the presence of even distribution of power and resources, justice and good governance. Positive peace is proactive in nature. It seeks to remove the underlying structural imbalances that present risks and vulnerabilities to people in short as well as in the long term [12]. Negative peace on the other hand is reactive in nature for it only seeks the cessation of actual or impending conflict. I describe it as “Peace on gain powder”. Peace can be defined from philosophical, sociological and political perspective. From the perspective of philosophy, it is the presumption state of man in society as God established it. Put in another way, it is the divine state of perfection or an earthly expression of God’s kingdom that is yet uncorrupted. Here peace is related to the original inclinations and desires of human beings, but did not address the social context of peace beyond the state of nature. Peace from sociological perspective addresses the social context. While philosophy addresses what ought to be, sociological looks at a condition of social harmony in which there are no social hindrances. Peace here is defined as a condition in which there is no social conflict and individuals and groups are able to meet their needs and expectations.    To achieve this kind of state, there are two sociological responses namely structural-functionalist and dialectical materialist responses. The first response posits that for a society to survive there is need to educate its children, produce goods, govern its affairs and provide security for its members. These function will necessitate a number of structures such as schools, industries, parliaments, courts etc. peace according to this group could be achieved where existing social structures perform their functions adequately, supported by the requisite culture, norms and values. The second response called the dialectical materialism associated with Karl Marx posits that to understand society, the processes through which it produces and distributes means of its material existence and struggles should be worked on (i.e. work and reward system). A society is usually divided into two. The dominant class do less of the work but gets much of the reward. This is seen as an exploitative relation who breeds class struggle and sometimes entails open and objective violence. From this perspective, peace may not be feasible as long as this exploitative economic relationship exist between the dominant class and the oppressed class. The imminent result is structural and revolutionary violence. From the political standpoint, peace is a political condition that makes justice possible. It entails political order or institutionalization of political structures. Institutionalization means that political structures acquire value and stability in the absence of institutionalization, there is primary of politics in that condition where every group uses its unique endowments to pursue and enforce its interest, mob riot, student’s demonstration, workers strike and soldiers organize coups. To create peace in such environment politics must be mediated by stable structures and secular culture [13]. 

     However, peace can as well be seen from macro level and micro level. At macro level it describes the effort towards peace at the international, multinational or national level. While micro describes the effort towards peace at local social institutions such as schools, community centres, hospital or religious centres within a country. Both at macro-global and micro levels there should be clarity about the terms “Peace keeping”, “Peace making” and “Peace building”. In the dominant of the 1992 UN Secretary-General’s titled “An agenda for peace: preventive diplomacy, peacemaking and peacekeeping” Peace building was defined as actions to identify and support structures which will tend to strengthen and solidify peace in order to avoid a relapse into conflict. Macro-peace building effort centres on comprehensive rehabilitation of social, political, economic and ideological structures

i.e. pro-human right orientation necessary to support and sustain both negative peace and positive peace. This is in line with the sociological structure-functionalist response. Macro-peace building initiative should build the soft infrastructure that will promote mutual understanding, trust and the diversity affirmation necessary to sustain positive relationships among people with diverse background [14]. The same document defines peacemaking as a third-party action to mediate hostilities between two parties and defined peacekeeping as deployment of UN troops in order to deter violence, to present conflict and to promote peace. In summary, peace building is peace through creating conditions necessary for peace such as attitudes, habits and behaviour and dispositions for positive peace. Peacekeeping is through strength while peacemaking is through dialogue. Peacekeeping activities aim at removing all forms of mistrust mitigating tension as well as open the way to further explore possibilities of security cooperation between belligerent states. [15] stated that John Holst identifies eight roles of peacekeeping as:

1.      Prevention of future conflicts or eruption of cold conflicts.

2.      Interposition by separating contestants and providing buffers.

3.      Restoration of a deteriorated situation.

4.      Preservation of a tenuous and threatened peace

5.      Facilitation of political resolution.

6.      Protection of law and order, public safety and services.

7.      Enforcement of the consensus of the Security Council.

8.      Punishment of violations of agreements or Security Council Resolution/Decision.

The principal aim of peacekeeping is to diffuse tension and to contain international disputes or conflict or to stop them from increasing and resulting to armed confrontation.

      Examining the impact of the civil wars in Angola and Mozambique on children, [16], showed that the use of child soldiers was part of the warfare strategy. Children were either recruited by force or they joined because they sought protection or revenge. He noted that in Mozambique the rebel forces, RENAMO, used a minimum of 10,000 child soldiers, some as young as six or seven years of age. In 1994, 27 percent of the soldiers presenting themselves for demobilisation were observed to be under the age of 18. In Angola a considerable proportion of the country’s children took part in combat, about seven percent of all Angolan children had fired at someone. Children were thus victims and perpetrators of violence. Also, due to sexual violence or exchange of intercourse which generates during conflict, girls often have babies of their own. This makes it more difficult for girls to catch up on education and job training. There is also a high prevalence of sexually transmitted diseases which require treatment. Furthermore, due to their wartime sexual experiences, girls are often regarded as

‘second hand’ and thus vulnerable to further abuse since it is more difficult for them to find husbands and have an ordinary family life. Rather than advocating special programmes, He suggested placing reintegration of child soldiers in wider programmes of social development and poverty eradication., distinguished between different levels of political violence and found particularly a negative growth impacts for civil wars which is relative to the less severe effects resulting from riots or coups, stated that natural resources are never the sole source of conflict inevitable. This is true because the presence of abundant primary commodities such as valuable minerals especially in low-income countries exacerbates the risks of conflicts and if conflict does break out, the availability of the commodities tends to prolong and make conflict harder to resolve. [19], explained that the most obvious cost of conflict could be the disruption of economic activities. This is because they drastically reduce the per capita taxable capacity of the economy since businesses are more likely to wind up because of distortions, people flee and seek refuge in other countries or end up crowded in relatively safe areas of the conflicting country. Infrastructures are, consequently, destroyed leading to less economic growth. This concurs with the present case of northern Nigeria where the boko haram insurgency has made a lot of people flee to other parts of the country and this in turn has reduced economic activities in the northern region of the country.  Supporting the above, rightly pointed out that conflict leads to the diversion of public expenditure away from output enhancing activities. He continued to show that the most obvious way in which conflict damages the economy is through the destruction of some resources. Finally, in response to the deterioration in the economic environment,

 private agents will engage in portfolio substitution; that is, shifting their assets out of the country. According to, conflicts tend to affect food security by creating food shortages, which disrupt both upstream input markets and downstream output markets, thus deterring food production, commercialization and stock management. Depending on the location of the fights in a country, crops cannot be planted, weeded or harvested, decreasing dramatically the levels of agricultural production. In conflict situations, food producing regions experience seizing or destroying of food stocks, livestock and other assets, interrupting marketed supplies of food not only in these regions but also in neighbouring regions. These predatory activities diminish food availability and food access directly, because both militias and regular armies in the field tend to subsist by extorting the unarmed populations for food and any other productive resources. Any food that the militias and armies cannot use immediately in the contested areas will be destroyed to prevent their adversaries from accessing it. An illustration is in Ivory Coast where farming fared poorly during the months following October 2002, when government and rebel forces engaged in combat. Cocoa and coffee farmers fled their holdings because of rebels’ threats, and cotton farmers in the North were short of income owing to their failure to transport their produce to the port of Abidjan., argued that corruption, particularly political corruption directly undermines democracy and governance by destroying the trust relationship between the people and the state. An indispensable obligation of the state is to provide the basic needs of its people and also to ensure the safety of its citizens. When the state fails to fulfil this obligation, or provides for some groups, but not for others, or worse when the leaders are corrupt, the people effectively reclaim their right to use force (conflict) in the resolution of disputes, often with disastrous consequences, such as a rise in crime and stunted development. He concluded that political corruption causes or worsens poverty which often leads to an increase in conflict, and in turn leads to the stunting of Development. Also, he strongly argued that political corruption is the major and most pervasive causal factor and the human needs theory most relevant to resolving conflict in Africa. [22], found out that each percentage point off the growth rate of per capita income raises the risk of conflict by around one percentage point. They observed that in urban areas, conflicts are more likely to last longer and to be more deadly. Also, conflicts are more likely to arise in countries with fast growing population. They found that the level of ethnic fractionalization equally contributes to the risk of conflict. Ethnic fractionalization is measured by the ethno-linguistic fractionalization index, which measures the probability that two randomly selected individuals from a given country do not speak the same language. [9], reported that there is a new wave of empirical evidence on the effects of conflicts on neighbouring countries; conflicts are not only devastating for the countries in which they are fought, but they also generate international spill over. They found that conflict substantially reduces the growth in the conflict torn country and that of its neighbour. This reduction can be attributed to multiple factors, such as the disruption to trade, heightened risk perception by investors, a reduction of input supply and resources spent on the assistance to refugees. Speaking on the negative impact of conflict on education attainment, found that from 1992 to 1998, exposure to the conflict, as measured by past damage to household dwellings, had a significant negative effect on enrolment of girls of ages 12-15 in schools. Girls who were of school age during the conflict and lived in conflict affected regions were 13% less likely to complete mandatory schooling as compared to girls who had the opportunity to complete their schooling before the conflict started, and 7% less likely to complete school than girls of the same age group who lived in regions relatively unaffected by conflict. [24], argued that domestic social conflicts are major determinat to understanding why growth rates lack persistence and why so many countries have experienced a growth collapse after the mid-1970s. Econometric evidence showed that countries that experienced the sharpest drops in growth after 1975 were those with divided societies (as measured by indicators of inequality and ethnic fragmentation) and with weak institutions of conflict management which was represented by indicators of the quality of governmental institutions, rule of law, democratic rights, and social safety nets also provides rich analysis on the effect of conflict on changes in the level and growth of GDP. They observed that civil war and genocide in the 1990-2000 periods in Rwanda caused convergence between provinces following the conflict shocks: previously richer provinces in the east and in the north of the country experienced lower, even negative, economic growth compared to the poorer western and southern provinces. This has in turn affected significantly the dynamics of household poverty in Rwanda in the same period provided a global panel data set of battle deaths. They defined battle deaths as deaths due to military operations; this includes military as well as civilian fatalities. However, they pointed out that  battle deaths are only part of the total war deaths. In addition to soldiers and civilians being killed in battle there are non-battle deaths which comprise of an increase in one-sided violence, an increase in crime and unorganised violence and in an increase in non-violent mortality (diseases). Speaking on the contributions of militarization on incidence of conflict in Africa, [27], argues that in associating militarization and conflict, caution needs to be taken because rather than the proliferation of arms in the society, it is the welfare-reducing effects of militarisation that causes violence. Besides, when it is appreciated that developed countries with more sophisticated arms than Africa are not in conflict like the later, militarisation as an explanation becomes weak. A study by [28], stated that during civil war military expenditure rises as a percentage of GDP from 2.8% to 5.0%. However, once the war has ended military expenditure does not return to its former level. The average country during the first decade post-conflict spent 4.5% of GDP on the military. The increase in government military spending is part of the diversion of resources into violence but also harmful to growth because the

 resources controlled by rebel groups are also a diversion from productive activities. These diversions might be significant, and they increase with the duration of the conflict. Using different data and methodology, [29], confirmed the negative economic effects of violent conflict for direct neighbours, but finds positive spill-over’s for non-contiguous areas. [30], compared growth rates of agricultural production in 38 conflict-affected countries and found substantially lower outcomes during violent conflict in comparison with the pre-war period. Violent conflicts affect economic outcomes mainly through the destruction of human and physical capital; shifts in public spending and private investment, as well as the disruption of economic activities and social life. The specific violent impacts depend on each conflict’s singular characteristics: it is not just the type of conflict, but also its intensity, duration, and geographical spread that shapes its economic consequences. He concluded that there is expectation that violent conflicts affect individual economic sectors differently, given differing characteristics [31]. The study by [32], considered the impact of post-conflict aid in a theoretical framework and suggested improving the sequencing of aid flows. Humanitarian help has the greatest welfare impact directly after the conflict but should be phased out in order to avoid counterproductive effects on economic growth and development. Reconstruction aid should be focused on the infrastructure rehabilitation of the tradable goods sector in order to avoid Dutch Disease effects. [33], stated that violent conflict hampers not only domestic exchange, but international trade flows as well. They observed that global trade flows are impeded to a greater extent by violent conflicts than by traditional tariff barriers. According to their estimates, bilateral trade flows for conflict-affected countries decline by up to 40 percent. [34], showed that, compared to the average recession, countries that are associated with civil wars are ten percentage points deeper and last for ten more months. They also showed that economic contractions are not always followed by offsetting fast recoveries and adverse shocks may lead to absolute divergence and lower long-run growth. [35], reported on the impact of conflict on food shortage through landmines. They noted that due to landmines, agricultural lands become inaccessible for years, harvests are destroyed and fields cannot be cultivated. Rural populations that depend on these fields for food are prevented from farming, therefore creating a breech in agricultural and food production. [36], explained that historically, when youths are not engaged in meaningful work and are lacking the basic necessities, they bring attention to their plight by engaging in destructive behaviour, this underscores the importance of Human Needs Theory. This result implies that when youths cannot bear their poverty (particularly lack of basic needs), caused or worsened by political corruption of most African leaders (who appear to be above the law or the law themselves) anymore, they react by engaging in conflict, with its negative effects, which stunt development

1.5 Objectives of the study

To achieve the above objectives, it is hypothesized that:

H01: The impact of lost peace in Nigeria has no negative significance on the economic development.

H02: Social values has no significant impact on conflict management in Nigeria

H03: Societal structures has no significant impact on conflict management in Nigeria

H04: Nigeria level of peacefulness has not contributed immensely to the size of its retail sector, stock market and tourism industry.


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