Nigeria’s annual military expenditure is expected grow from $1.8bn in 2016 to $2.1bn by 2021, at a compound annual growth rate of 3.73%, according to a report by Strategic Defence Intelligence (SDI).
Titled ‘Future of the Nigeria Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2021’, the report offers insights into the Nigerian defence industry.
The average capital expenditure allocation for defence during 2016-2021 is anticipated to be 34.4% of the total budget, whereas the revenue allocation is projected to be 65.6%. The allocations for the Nigerian Air Force are anticipated to increase from 20.9% during 2012-2016 to 21.2% over the forecast period.
Allocations for the Army and Navy are anticipated to marginally decrease from an average of 37% and 20.3% over the historic period, to 36.9% and 20.2% respectively during 2017-2021.
The defence spending is anticipated to be driven by the Nigerian Armed Forces’ initiatives to counter the burgeoning threat of home grown pro-Islamic insurgent group Boko Haram, piracy and oil smuggling, and to support peacekeeping operations.
The Nigerian Ministry of Defence intends to procure fighters and multi-role aircraft, infantry fighting vehicles (IFV), attack helicopters and transport aircraft, riverine patrol craft and offshore patrol vessels (OPVs).
Fall in oil prices, however, is likely to force the oil-dependent economy to prioritise defence spending over the sectors, says the report.