By Demola Bakare 

For more than a decade, Nigeria has invested enormous resources in combating banditry, kidnapping, terrorism, and other forms of violent crime. Military operations have been intensified. Security budgets have increased. New equipment has been procured. Yet insecurity remains one of the country’s most pressing governance challenges.

The persistence of these threats suggests that insecurity cannot be defeated through kinetic measures alone. Security agencies can neutralize criminals, but unless the systems that sustain criminality are weakened, new recruits and networks often emerge to replace those dismantled.

This reality calls for a broader national conversation about the governance and economic dimensions of insecurity. Two policy initiatives that appear unrelated to security—the cashless policy and local government autonomy—may, in fact, constitute some of Nigeria’s most promising long-term weapons against violent crime.

One targets the financial lifeblood of criminal enterprises. The other addresses governance failures and developmental deficits that create fertile ground for criminal recruitment. Together, they can complement traditional security measures and contribute to a more sustainable security architecture.

Following the Money: The Financial Foundations of Insecurity

Modern criminal enterprises operate much like businesses. Whether it is kidnapping for ransom, banditry, illegal mining, arms trafficking, terrorism, or human trafficking, every criminal network depends on finance.

Weapons must be purchased. Informants must be paid. Logistics must be maintained. Recruits often receive incentives. Criminal activities survive because money flows.

This is why global counterterrorism and anti-organized crime strategies increasingly focus on financial disruption rather than solely on armed confrontation.

The famous principle adopted by many security agencies worldwide is simple: follow the money.

In Nigeria, kidnapping has become one of the most profitable criminal enterprises largely because ransom payments are often made in cash. Once cash changes hands, tracing its movement becomes extremely difficult. Criminals exploit this anonymity to sustain operations and expand their networks.

The Central Bank of Nigeria’s cashless policy offers an opportunity to change this dynamic.

Electronic transfers, digital wallets, mobile banking, and other financial technologies create transaction trails that can be monitored by financial institutions and law enforcement agencies. Unlike cash transactions, digital transactions generate data that can assist investigations and expose criminal financing networks.

This is precisely why institutions such as the Nigerian Financial Intelligence Unit (NFIU), the Economic and Financial Crimes Commission (EFCC), and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) increasingly rely on financial intelligence in their investigative work.

Globally, financial surveillance has become a cornerstone of security policy. Following the September 11 attacks, the United States and its allies significantly strengthened mechanisms for tracking suspicious financial transactions. The objective was not merely to arrest terrorists but to identify and disrupt the funding structures that enabled terrorism.

The lesson remains relevant today: criminals can evade checkpoints, but they struggle to operate when deprived of resources.

 Shrinking the Shadow Economy 

Nigeria’s informal economy is one of the largest in Africa. While informality is not inherently criminal, large volumes of untraceable cash create opportunities for illicit activities to thrive.

Bandits collect illegal taxes in some rural communities. Terrorist groups impose levies on local populations. Illegal mining operations generate substantial cash revenues. Arms traffickers and criminal syndicates frequently rely on cash-based transactions.

The more economic activity migrates into transparent and regulated financial channels, the harder it becomes for criminal actors to hide.

The cashless policy should therefore be viewed not merely as a banking reform but as a national security instrument.

To achieve this objective, however, financial inclusion must accompany financial digitization. Millions of Nigerians in rural communities still lack access to banking infrastructure, digital payment platforms, and reliable telecommunications services. Without addressing these gaps, criminals may continue exploiting cash-dependent populations.

Government must therefore expand broadband infrastructure, mobile banking access, agent banking networks, and digital literacy programmes, particularly in vulnerable communities.

The Governance Deficit Behind Insecurity 

While disrupting criminal financing is important, insecurity in Nigeria also has deep governance roots.

Across many communities affected by banditry and violent crime, citizens face chronic poverty, unemployment, poor educational opportunities, weak healthcare systems, inadequate infrastructure, and limited government presence.

Where governance retreats, criminality advances.

Numerous studies by development agencies and security analysts have demonstrated a strong relationship between state fragility, poor service delivery, youth unemployment, and violent extremism.

The challenge is particularly evident in rural areas where local governments ought to serve as the primary vehicles for grassroots development but have often lacked the financial independence and administrative capacity necessary to fulfil that role.

This is why the Supreme Court’s landmark judgment affirming local government financial autonomy may prove to be one of the most significant governance reforms in recent years.

For decades, concerns have been raised that the State-Local Government Joint Account system weakened local governance by limiting the ability of local councils to directly access and utilize constitutionally allocated funds.

Financial autonomy presents an opportunity to reposition local governments as genuine development actors.

Local Governments as Frontline Security Institutions 

Security does not begin at military barracks. It begins in communities.

Local governments are uniquely positioned to identify emerging threats before they escalate into major security crises. They are closer to traditional rulers, community leaders, youth groups, women’s associations, and local institutions.

This proximity gives them significant advantages in early warning, conflict prevention, and community engagement.

More importantly, autonomous local governments can directly invest in interventions that reduce the appeal of criminal recruitment.

When young people have access to quality education, vocational training, healthcare, agricultural support, and employment opportunities, criminal organizations find recruitment more difficult.

Research from various conflict-affected regions around the world consistently shows that development and security are mutually reinforcing. Communities that experience inclusive development are generally less vulnerable to violent extremism and organized crime.

In this regard, local government autonomy should be viewed not merely as a constitutional matter but as a security reform.

The Accountability Imperative 

Critics rightly argue that autonomy alone does not guarantee development. Local governments can be susceptible to corruption, patronage, and inefficiency.

This concern is legitimate.

However, the solution is not to deny autonomy but to strengthen accountability.

Here, the cashless policy and local government autonomy intersect in powerful ways.

Imagine a system where federal allocations to local governments are digitally transferred, procurement processes are conducted electronically, contractor payments are traceable, and budget implementation is publicly accessible online.

Such a system would significantly reduce opportunities for diversion of funds while increasing transparency.

The NFIU has already demonstrated the importance of financial transparency at the local government level through its efforts to strengthen monitoring of public funds. Similar reforms can be expanded through digital governance platforms, e-procurement systems, open budgeting initiatives, and real-time expenditure tracking.

The result would be greater public confidence, improved service delivery, and stronger developmental outcomes.

Lessons from International Experience 

Several countries have demonstrated how governance reforms and financial transparency can contribute to security outcomes.

In Kenya, mobile money platforms have enhanced financial inclusion while providing authorities with additional tools for tracking suspicious transactions.

In Colombia, strengthening local governance structures formed an important component of efforts to reduce the influence of armed criminal groups in rural areas.

In Indonesia, decentralization reforms helped improve local development outcomes in many regions by bringing governance closer to communities.

While Nigeria’s circumstances are unique, these examples reinforce a common lesson: sustainable security requires more than force. It requires effective institutions, transparent financial systems, and responsive local governance.

Towards a New Security Paradigm 

Nigeria’s security strategy must evolve beyond a narrow focus on military responses.

Banditry, kidnapping, and terrorism are not merely law-enforcement problems; they are symptoms of deeper governance and economic challenges. Defeating them requires addressing both the financial structures that sustain criminality and the developmental deficits that enable recruitment.

The cashless policy can help expose and disrupt illicit financial networks. Local government autonomy can strengthen grassroots development and restore state presence in vulnerable communities.

Together, these reforms can complement military operations, intelligence gathering, and law enforcement efforts.

The future of Nigeria’s security architecture lies not only in stronger weapons but also in stronger institutions; not only in more checkpoints but also in more accountable local governments; not only in arrests and prosecutions but also in transparent financial systems that make crime increasingly difficult to finance.

Ultimately, the most effective security strategy is one that prevents criminality from taking root in the first place. By combining financial transparency with grassroots governance, Nigeria can move closer to that goal and build a safer, more prosperous, and more resilient nation.

Demola Bakare fsi, Peace and Development Expert, writes from Abuja