Emerging markets presently engulfed in internal and regional tensions such as Nigeria are boosting defence allocations through the purchase of arms and ammunition from domestic arms and ammunition manufacturers.
Between 2015 and 2016, South Korea, an emerging market which is presently engulfed in regional crisis with its northern neighbour, increased defence spending with additional $1.46 billion, which brought the amount spent on arms and ammunition in 2016 to $8.4 billion, an increase of 21 per cent over $6.94 billion expended in 2015, the analysis of the Top 100 Arms and Ammunition producers by SIPRI has shown.
READ ALSO: Air Force to get 19 new Aircrafts to fight insecurity
“South Korean arms producers held a 2.2 per cent share of the total Top 100 sales in 2016, putting South Korea alongside ‘other established producers’ such as Israel and Japan. The growth in sales is largely due to rising threat perceptions in South Korea. This has accelerated the acquisition of military equipment, which South Korea increasingly sources from its own arms industry based on policy considerations”, SIPRI Factsheet stated.
Similarly, Turkey, another emerging market witnessed a 27.6 per cent increase in arms sales from $1.84 billion in 2015 to $2.34 billion in 2016, SIPRI Factsheet has shown.
“The arms sales of Brazilian and Turkish companies also rose in 2016, growing by 10.8 and 27.6 per cent respectively”, the annual publication stated.
Top SIPRI Factsheet, a publication of the Stockholm International Peace Research Institute (SIPRI) and which was released in December 2017, came at a time Nigerian leaders haggle over the withdrawal of $1 billion from the Excess Crude Account (ECA) to fund defence operations.
Even if the $1 billion is approved, at an exchange rate of N305/$, Nigeria’s total budget spending for 2018 will come to $5.2 billion, of which 35 per cent capital expenditure amounts to $1.81 billion, a far cry from the capital expenditure of countries having similar challenges.
We arrived at this figure by adding the recurrent and capital expenditure of the Ministry of Defence, Ministry of Interior, Police Compliant Commission, Police Service Commission and the office of the National Security Adviser (NSA).
Femi Adetola, a security expert attributed the dispute over the $1 ECA fund to the forthcoming 2019 general elections.
READ ALSO: Unveiling Nigeria’s 2021 budget
“Crisis in most cases happen unexpectedly and it is not that our political leaders don’t understand the magnitude of the security challenges before the nation. They know what is as stake. Therefore, the disagreement that greeted the announcement of $1 billion withdrawal from ECA is for them to score political points. Everyone wants to be relevant”, Adetola said.
“When it comes to the protection of lives and property, political differences must be put aside”, he added.
Based on the analysis of the SIPRI Factsheet, the top 100 arms-producing and military services companies in 2016 sold arms and ammunition worth $374.8 billion, an increase 3.08 per cent over $363.6 billion made in 2015. Collectively, these firms made $51.9 billion profit and created 3.04 million jobs.
Thirty-eight firms from the United States of America (USA) made the list recording $217.2 billion compared to $208.9 billion in sales made in 2015. They made $36.1 billion profit and created 1.5 million jobs during the period. Twenty-eight European firms in 2016 made $95.4 billion from arms sales, and that was marginally above $95.2 billion recorded in the previous year. Lockheed Martin Corporation, $40.8 billion; Boeing, $29.5 billion; Raytheon, $22.9 billion and Northrop Grumman Corporation, $21.4 billion topped the list American companies with arms sales in 2016 while the Airbus Group with $12.5 billion revenue in 2016 led the companies from Europe that recorded the highest sales. In addition, 9 Russian firms made $25 billion from arms sales in 2016.
TELIAT SULE
