Nigeria - Military Spending

Nigeria, in particular, spent only 1% of its Gross Domestic Product (GDP) on its military in 2010, as compared with 4.8% by the U.S. during the same period. However, in 2011 Nigeria increased its defense budget by 32%, elevating it to the seventh largest spender on its military on the African continent and securing its place as the largest military contributor in ECOWAS.

Nigeria underwent a cash crunch from the mid eighties which resulted in the implementation of the Structural Adjustment Program (SAP). Thus, there was a decline in GDP and capital funding. The competing demands for funds from social services sectors in the emerging environment compounded the problem. Accordingly, there was decline in defence allocation. The Nigerian Air Force [NAF] was part of the defence sector affected. The highest percentage of the actual allocation to NAF compared with the annual budget proposal was just 31% in 2002.

These issues coupled with the sanctions imposed by the international community in the nineties, effective engineering support declined leading to the grounding of most NAF aircraft. Planned Depot Maintenance (PDM) on aircraft was generally contracted out to foreign firms that had adequate facilities and expertise to perform the work. For example, PDM on NAF C-130 aircraft were undertaken by Lockheed Aircraft Corporation USA, Marshals of Cambridge UK, Singapore Aircraft Industries Singapore and Dornier Gmbh of Germany. Government was able to sustain expenses in procuring aircraft spare parts and associated equipment and, equally provided for the cost of these PDMs, thus guaranteeing availability of aircraft for NAF operational commitments. These favorable financial conditions gradually deteriorated over the years and continued up to 2010.

In the light of the IMF recommendation that military spending in Africa be reduced to 15 percent of gross domestic product, Nigeria's strength of 150,000 men was recognized as excessive and impossible to maintain. The budget to administer and maintain such a force is not compatible with the priorities of President Obasanjo's administration, and therefore the Ministry of Defence devised a blueprint to transform Nigeria's armed forces. The plan was to forge a mobile well-equipped, well-maintained and highly motivated force, able to face the challenges of the future and contribute to national development.

One of the contentious provision of National Defence Policy [NDP] is funding. It is very possible to actualize the provision of the NDP, if the government adequately fund the AFN to transform it to the standard required to achieve the NDP. In the NDP, it was stated that effort shall be made to modernize and upgrade military equipment to enable the military forces discharged their constitutional duties creditably at home and abroad. This requires an appropriate level of funding for theforce. Global recommendation suggest defence budget of 1.5% -3% of the GDP. However a given country's peculiar circumstances will ultimatelydetermine the percentage to be adopted by that country and the need to reprofessionalize the military.

The budget rose between 2000-2003, dropped in 2004, rose again in 2006 and dropped to its lowest in 2007 and rose again in 2008. These trends in budgeting for the AFN portend great challenges for effective planning, equipment maintenance among others, that are imperative for transformation process. The Average GDP percentage between 2000-2008 was 1.06 percent. This is below the United Nation's recommended defence GDP of between 1.5-3.3 percent.

Fundamentally, funding is a challenge that cuts across other Navy issues. The twin problems are those of insufficient funds and untimely releases. Beyond acquisition cost of ships, the reality of maintenance to ensure ship availability must be considered in allocation of funds. Typically, 10 percent of acquisition cost is supposed to be allocated to maintenance annually. This is about N50.4 billion of the estimated cost of Nigerian Navy ships put at N504 billion as at 2007. However, in practice, the funds released for maintenance of ships in the Nigerian Navy is very inadequate.

According to the World Bank, military expenditures data from SIPRI are derived from the NATO definition, which includes all current and capital expenditures on the armed forces, including peacekeeping forces; defense ministries and other government agencies engaged in defense projects; paramilitary forces, if these are judged to be trained and equipped for military operations; and military space activities. Such expenditures include military and civil personnel, including retirement pensions of military personnel and social services for personnel; operation and maintenance; procurement; military research and development; and military aid (in the military expenditures of the donor country).

Excluded are civil defense and current expenditures for previous military activities, such as for veterans' benefits, demobilization, conversion, and destruction of weapons. This definition cannot be applied for all countries, however, since that would require much more detailed information than is available about what is included in military budgets and off-budget military expenditure items. (For example, military budgets might or might not cover civil defense, reserves and auxiliary forces, police and paramilitary forces, dual-purpose forces such as military and civilian police, military grants in kind, pensions for military personnel, and social security contributions paid by one part of government to another.)

NATO defines defense expenditure as payments made by a national government specifically to meet the needs of its armed forces or those of Allies. A major component of defense expenditure is payments on Armed Forces financed within the Ministry of Defense (MoD) budget. Armed Forces include Land, Maritime and Air forces as well as Joint formations such as Administration and Command, Special Operations Forces, Medical Service, Logistic Command etc. In view of the differences between the NATO and national definitions, the figures shown may diverge considerably from those which are quoted by national authorities or given in national budgets.

They might also include "Other Forces" like Ministry of Interior troops, border guards, national police forces, customs, gendarmerie, carabinierie, coast guards etc. In such cases, expenditure should be included only in proportion to the forces that are trained in military tactics, are equipped as a military force, can operate under direct military authority in deployed operations, and can, realistically, be deployed outside national territory in support of a military force. Also, expenditure on Other Forces financed through the budgets of ministries other than MoD should be included in defense expenditure.

Pension payments made directly by the government to retired military and civilian employees of military departments should be included regardless of whether these payments are made from the budget of the MoD or other ministries. Expenditures for peacekeeping and humanitarian operations (paid by MoD or other ministries), the destruction of weapons, equipment and ammunition, and the costs associated with inspection and control of equipment destruction are included in defense expenditures.

Research and development (R&D) costs are to be included in defense expenditures. R&D costs should also include those for projects that do not successfully lead to production of equipment. Expenditure for the military component of mixed civilian-military activities is included, but only when this military component can be specifically accounted for or estimated. Financial assistance by one Allied country to another, specifically to support the defense effort of the recipient, should be included in the defense expenditure of the donor country and not in the defense expenditure of the receiving country. War damage payments and spending on civil defense are both excluded from the NATO definition of defense expenditure.