International Journal of Independent Research Studies

Volume 3, Number 2 (2016) pp 47-57 doi 10.20448/800.3.2.47.57 | Research Articles

 

Security Situation and Business Activities in Kogi State: A Post Study

Emmanuel Okokondem Okon 1
1 Department of Economics Kogi State University Anyigba, Kogi State, Nigeria

Abstract

This is a post study on security situation and business activities in Kogi state. Previous study showed that the security situation in Kogi state has become a major challenge for investors, and could pose a threat for its economy with implication for investment and job losses. However, findings from this study reveals that a high percentage of respondents agreed that for some months now their towns are becoming safe. However, a reasonable number of respondents felt that the fear of insecurity is still making investment unattractive to some business people in their towns and some business enterprises that closed down in their towns have still not re-opened. Though physical security measures have been heightened in towns as agreed by a high percentage of respondents but no new infrastructure has been put in place to create the enabling environment for business to thrive again. This study argues for the need to overhaul existing infrastructure as well as provide some new ones. As such, government should increase and improve power generation capacity to ensure that electricity is regularly supplied to every nook and cranny of the state.

Keywords:  Insecurity, Business activities, Kogi State, Nigeria, Post study

DOI: 10.20448/800.3.2.47.57

Citation | Emmanuel Okokondem Okon (2016). Security Situation and Business Activities in Kogi State: A Post Study. International Journal of Independent Research Studies, 3(2): 47-57.

Copyright: This work is licensed under a Creative Commons Attribution 3.0 License

Funding : The authors declare that they have no competing interests.

Competing Interests: The author declares that there are no conflicts of interests regarding the publication of this paper.

History : Received: 13 August 2016/ Revised: 2 September 2016/ Accepted: 5 October 2016/Published: 29 October 2016

Publisher: Online Science Publishing

1. Introduction

Lately, Nigeria has been enmeshed in a firebox of insecurity leading to scores of deaths of innocent civilians, foreigners, some members of the nation’s security personnel, elected officials and many government workers. The insecurity challenge has assumed formidable dimensions forcing the country’s political and economic managers and, indeed the entire nation, to rue the loss of their loved ones, investments and absence of safety in most parts of the country (Comfort et al., 2013).

In the north central part of Nigeria, Kogi state has become a battle field where gunshot sound has become so common, fear has taken the place of trust, neighbor spy over neighbor, and sense of abandonment have taken over (Economic Issues, 2012). From police incident information and news media stories, the armed robbers and terrorists that disturb Kogi state do not target residential houses or schools or hospitals, rather they specifically target business premises, hotels, petrol stations and vehicles suspected to carry traders.  Also, the commercial banks that support businesses in the state are equally under attack.

Findings of the study by Okon et al. (2015) suggest that the security situation in Kogi state has become a major challenge for investors, and this could pose a threat for its economy with implication for investment and job losses. The study recommended among others that government of Kogi state should overhaul the security agencies in the state to meet the current security challenges.

Twelve months later, a post study was conducted with the following objectives:

  1. To investigate whether the towns are becoming safer
  2. To ascertain whether insecurity is still making investment unattractive in the towns
  3. To examine if crime incidents on the roads to the towns are so persistent
  4. To ascertain whether physical security measures in the towns are now heightened by local or state government
  5. To investigate whether new infrastructure have been put in place in the towns to create enabling  environment for business to thrive again

The remainder of the paper is structured as follows: The next section gives a historical development of Kogi State, economic activities as well as the security situation,  section three presents a review of empirical studies. The fourth section shows the methodology adopted for the study. Section five presents result and discussion while section six of the paper carries the summary, conclusion and recommendation.

2. Historical Development of Kogi State

Kogi State, which was created out of the former Kwara and Benue states on August 27, 1991, covers the area of the former Kabba Province. The Province was split into two in 1976, with one part in Kwara State and the other in Benue State.The people, who were thus put in separate states, had lived together under the same administrative structure for more than seventyfive years before their separation. The reunification of these two separate parts of the former Kabba Province, now renamed Kogi State, was therefore a restoration of old and cherished ties in the local administration of the area (Onlinenigeria, 2003). It has its boundary with Niger and Plateau States and the Federal Capital Territory, Abuja to the north, Benue and Enugu States to the east, while Edo, Ondo and Kwara States are on the western side (Onlinenigeria, 2003).

Fig-1. Map of Nigeria showing the position of Kogi state
Source: Freelanceglobalmedia.com (2013).

Kogi state has a total land area of 28,313.53 square kilometres and a projected population of 3.3 million people (Logbaby, 2012). It lies on latitude 7.49oN and longitude 6.45oE with a geological feature depicting young sedimentary rocks and alluvium along the riverbeds, which promotes agricultural activities (Logbaby, 2012). The state features ferrasols soil type and famous hills like ososo hills, which spread from Edo State to the western part of Kogi State and aporo hill on the eastern part. Another famous mountain is Mount Patti, which lies in Lokoja and stands at about 750 metres above sea level (Logbaby, 2012).

Fig-2. Map of Kogi state
Source: Aoav.org.uk (2013).

The state is made up of Igala (Ankpa, Dekina, Bassa and Idah), Ebira (Okene, Adavi and Okehi), Kabba (Oyi) and Kwara (Kogi) divisions of the former Kabba Province, and these together constitute the present twenty-one local government areas (LGAs) of the state (thirteen local government areas from the former Kwara and eight from Benue States, see Table 1) (Onlinenigeria, 2003). The headquarters of the local government areas served as important traditional, cultural and market centres in their localities for varying lengths of time, since the nineteenth century, and others earlier. Lokoja, which serves as the headquarters of Lokoja Local Government is also the capital of Kogi State.

Table-1. Local Government Areas in Kogi State
Source: Logbaby (2012).

2.1. Economic Activities in Kogi State

The majority of the people of the state are farmers. The State is blessed with suitable ecological and climatic conditions. It is therefore possible to produce various agricultural products including yam, cassava, soya bean, cocoyam, maize, millet, rice, guinea corn, palm produce, cowpea and others. The State's rich agricultural endowment is reflected in its capacity to produce cash crops like cocoa, coffee and cashew.

Kogi State is blessed with strategic minerals. These include iron ore, mica, marble, limestone, coal, crude oil. Others include; gold, kaolin, casserite, columbite, tantalite, feldspar and dolomite. Significantly, the nation's premier iron and steel complex is located at Ajaokuta.

Industrially, Kogi State is an investors' haven, the state has a number of Industrial ventures which include Ajaokuta Iron and Steel complex, Jakura Marble, Valley Food, Mopa Okura Sawmill, Idah Ceramic Company, oil palm Company, Nigeria Iron-Ore Manufacturing Company.

Limestone and marble deposits are found in Ajaokuta, Jakura, Ososo, Osara, while Cassiterite, columbite and tantalite are found in Egbe. Gold is also found in Isanlu in East Yagba Local Government Area while Iron Ore can be found at Itakpe, Okene (Nigeriagalleria, 2015).

The proximity of the state to the new federal capital territory (Abuja) and its rich mineral and agricultural resources, would certainly turn the state into a leading commercial centre in Nigeria in the near future. The state is richly endowed in tourist attractions and has no less than twenty-three tourist centres concentrated in the state. Important festivals include the nationally acclaimed Ovia festival among the Ogori and Mangogo people.

Tourist attractions such as Lord Lugard's residence and office can be seen in Lokoja. There are also the spot where the Royal Niger Company flag was lowered in 1890, the iron of liberty - the spot where slaves were freed in 1860. The biggest European cemetery in Nigeria containing the remains of the European soldiers of the West African Frontier Force (WAFF) stationed in Lokoja until 1926 and those of European missionaries. Some of the tomb stones in the cemeteries date as far back as 1867 (Nigeriagalleria, 2015).

There is also the World War cenotaph-this is a war memorial erected in memory of the soldiers who died during the two world wars. There is a list of names of some soldiers who distinguished themselves in the wars on a table.

Niger-Benue confluence - This forms a beautiful scenery visible either from a boat travelling southward on the river or from the top of Mount Patti.

Kogi state's ethnic diversity makes for an interesting, eclectic and colorful mix of celebrations and events, traditionally and religiously.  Among festivals and carnivals are: Egbe Festival, Epa Festival, Ekuechi Festival, Italo Festival, Lokoja Fishing Festival, Ogani Festival, Oganyiganyi Festival, and Ovia-Osese Festival.

2.2. Security Situation in Kogi State

There are three dimensions to the security problems in Kogi state:

  1. Although the problem of Boko Haram terrorism has been more substantial in the North East of Nigeria and in states like Kano and Kaduna, however, the discovery of several terrorist enclaves, especially IED/bomb making “factories” in Okene area of Kogi in early 2012 did lead to series of clashes between security agencies and the terrorists. These clashes and fear of further terrorist activity have had significant effects on businesses in Okene which is an important commercial town in Kogi state. Worst hit is the hospitality and service businesses in the town. Today, many restaurants, hotels, supermarkets, petrol stations are counting their losses as a result of lack of patronage while some of them have completely closed down.
  2. While robberies are not new in Nigeria, robbery attacks on banks and business premises in the Western and Eastern zones of Kogi state which peaked between early 2012 and this year have become a serious challenge to businesses in towns like Kabba, Ayetoro, Idah, Ankpa, etc. Over 15 robbery incidents specifically targeting commercial banks and microfinance houses were reported last year alone with a reported estimated loss of over N400million. For instance, the Punch newspaper of 26 April 2012 reported one incident in which 15 robbers arrived in five SUVs and virtually wiped out the vault of a first generation bank in Ankpa town before attempting to rob another bank in another part of the town on the same day. This has led many banks to close shop for several weeks while presently many of them have reduced their opening hours. Restaurants, hotels, supermarkets/provision stores and petrol stations have not been spared, and many of them have virtually closed.
  3. The third dimension of the insecurity in Kogi state is the persistent highway robbery incidents on the Okene-Lokoja-Abaji highway. This highway is Nigeria’s second busiest road in terms of traffic and carries mostly businessmen and women going from north to south of Nigeria (and vice versa).  Armed bandit have laid siege on this road causing serious damage to the economy of Kogi as transporters, particularly traders moving goods across the country are regularly robbed thus forcing many people to avoid using the road, and in the process, transportation of goods coming to Kogi state becomes more expensive. This problem has become so serious that the Kogi House of Assembly even noted that “the activity of armed robbers along this road in recent time is worrisome. Motorists plying this route are in perpetual state of fear as a result of the criminal and dangerous operation of the men of underworld” (Legisreportsng, 2013).
Figure-3. SSS Arrest Kidnappers Operating in Military Uniforms.
Source: Ksuamebo (2016).

3. Review of Empirical Studies

As observed by Kimou and Gyimah-Brempong (2012) many authors have pointed out the negative impact of crime either on economic growth (Rubio, 1996) poverty (Fafchamps and Minten, 2006) human capital investment (Fajnzylber et al., 1998; 1999) or on social capital formation (Glaeser et al., 1996). However, inquiry on the economic consequence of crime and violence at the firm level is becoming of great interest.

In Bates and Robb (2008) investigated the effects of crime rate on firm performance at different locations and concluded that the effect of crime on firm performance might be indeterminate. If low crime areas offer higher returns than high crime areas, investments should be driven to high crime area locations until returns are equalized across all locations. If high-crime locations are riskier than low-crime areas, investments flows should be driven towards the high-crime area, only if firms operating in that area earn above-average profits that exceed the cost of crime because of the disutility or decreased production up to a point where expected returns to capital are equalized across the two areas (Kimou and Gyimah-Brempong, 2012).

Using survey data on business owners in the United States, multivariate analysis, and taking into account neighborhood of market operation and separating small business from other businesses, Bates and Robb found that firms that are concerned about crime are no less viable than other identical firms reporting that crime has no impact on their business. That finding suggests that firms do not take into account high crime in decision to operate in an area.

Rosenthal and Ross (2010) analyzed the effects of crime on business location in five US cities. Combining crime data and business survey and assuming that land bids differ monotonically with violent crime, they found that while firms tend to disproportionately locate in high-crime areas, an increase in 100 violent crimes would reduce the retail share of employment by 22% and reduce the high-end share of local restaurants by 4.4 percentage points (Kimou and Gyimah-Brempong, 2012).

Krkoska and Robeck (2009) investigate different aspects of victimization at the firm level in Europe and Asia, pointing out the effect of size, sector, sales growth, and business conduct as significant determinants of the likelihood of being targeted from both street firms and organized firms. Another major finding is that firms that spend a higher share of their sales on security services reinvest a lower share of their profit; suggesting that both direct (spending on security services) and indirect effects (perception of crime) negatively impact investment at the firm level. Using a quasi-experimental methodology on geographically disaggregated crime data across five American cities, Greenbaum and Tita (2004) found that increased violence has the largest impact on slowing the creation of new retails businesses. Other studies that indicate either a positive or a negative effect of crime on business do not take into account the cost of self-protection and the direct cost of crime through decreased production.

Very little is known about the impact of crime in economic activities in the Sub-Saharan Africa. Collier and Duponchel (2010) found that the intensity of the civil conflict in Sierra Leone negatively affects labor skill accumulation at the firm. Based on a theoretical approach borrowed from the shirking model, Azam and Langmoen (2001) empirically investigated the determinants of thefts reporting at the manufacturing firm level in Cote d'Ivoire. They found that firms that use informal means for recruitment or do not pay or pay their workers less than market wages, are likely to report theft more frequently than others. This paper, while pinpointing criminal behavior and private enforcement of the law at the firm level, did not indicate the extent to which criminal activity affected business activity in general. Further, the conclusions of the paper reveal basically a human resources management issue- selecting honest workers- rather than showing how criminal activities impact the enterprise's growth (Kimou and Gyimah-Brempong, 2012).

Okon et al. (2015) examined the impact of insecurity on business activities in Kogi State. Questionnaire was used to collect the primary data from targeted groups in the population. The findings of the study suggest that the security situation in Kogi state has become a major challenge for investors, and this could pose a threat for its economy with implication for investment and job losses. The present security challenge could diminish the state’s ability to command local and international respect. The study recommended among others that government of Kogi state should overhaul the security agencies in the state to meet the current security challenges. Provision of new infrastructure as well as mending of dilapidate ones should be carried out in the state. It should be ensured that the major cities have functional street lights to enhance security. Similarly, it was suggested that the state government should create more job opportunities for the teeming number of unemployed youths.in the fair value hierarchy would increase comparability in accounting practice among entities.

Table-2. Result of Responses
Source: Author’s computation

In a follow up question about insecurity still making investment unattractive to business people in their towns, 46% of respondents agreed that investment in their town is still unattractive to business people because of fear of insecurity. On the contrary, 43% of respondents disagreed and 2% even strongly disagreed. When the issue of persistent crime incidents on the road to their towns was raised, Table 2 shows 83% of respondents disagreeing and 11% more strongly disagreeing. Though a total of 7% were of the opinion that crime incidents on the road to their towns is still persistent. This response cannot be compared to the overwhelming disagreed response of the respondents. On the issue of re-opening of business enterprises that closed down in their towns, respondents’ perception shows that 47% agreed while 38% agreed.

The questionnaire was also designed to investigate the heightening of physical security measures in towns by local or state government. 86% agreed that they have noticed the presence of more security personnel in their towns and patrol has intensified. However, 5% disagreed that physical security measures have not heightened. No change in security measures have been noticed in towns.

In a related issue, respondents were asked about the effectiveness of the safety measures employed by their business organizations. 89% agreed that it is still very effective. 7% of respondents did not think so. When the question of government putting new infrastructure in place to create the enabling environment for business to thrive again in their towns, 45 respondents out of a total of 82 (about 55%) disagreed that government has created the enabling environment for business to thrive again in their towns and about 45% (37 respondents) expressed strong disagreement on this matter that no infrastructure whatsoever has been put in place.

Table 2 also contains the weighted scores and means of the issues raised during the post advocacy study on the security situation and business activities in Kogi state. The Likert scale values were used to calculate the weighted scores and means. These values are ranked and then used to determine the severity and importance of those issues raised for decision making.Heightening of physical security measures by local or state government and safety of towns were major important questions raisedwhich revealed the situation of on ground as shown in Table 2. This is shown by 86% and 82%agreement response in favor of these issues with mean scores of 3.0 each. This is followed by the question: are safety measure employed by business organizations still effective in the town with 2.9 mean score; is insecurity still making investment unattractive to business people in the town with a mean score of 2.6. The question on business enterprises that closed down in the town re-opening has a mean score of 2.5.  Are crime incidents on the road to the town still so persistent; and have new infrastructure been put in place to create the enabling environment for business to thrive again in the town both have 2.0 and 1.6 mean scores respectively. Though the question on new infrastructure been put in place to create the enabling environment for business to thrive again in the town is ranked lowest, it should not be completely ignored. According to Bello (2011) there is growing international evidence that a sustainable business climate in which entrepreneurship and private investment is encouraged within the ambiance of sound government policies (including infrastructural policies) is essential for the promotion of rapid and sustainable development.

4. Methodology

The study was conducted in selected communities of Kogi State in the three senatorial districts. The study purposely selected communities that had suffered security challenges in the recent past which were investigated before.  In the eastern zone, Anyigba, Idah and Ankpa were studied before but it was only Anyigba that was chosen again. In the central zone, Okene, Adavi and Lokoja were studied earlier but it was only Lokoja that was considered. Only Aiyetoro was chosen among the places earlier selected (Kabba, Aiyetoro and Iyamoye) in the western zone. The study specifically and purposely targeted two groups in the population. These groups are: business owners that have not been directly affected by insecurity; business owners that had been previously affected by insecurity.

The primary data were collected using structured questionnaires that were administered to some staff of financial institutions and some selected business owners. The structured questionnaires were administered to a sample of 30 respondents in each of the places selected in the senatorial zones. A very few respondents declined to give information while some respondents cooperated and filled the questionnaires correctly. 29 questionnaires were retrieved in the eastern zone, 26 questionnaires in the central zone and 27 questionnaires in the western zone giving a total of 82retrieved questionnaires out of the 90 administered. This represented 91 percent retrieval rate. Below is the Likert-type scale questionnaire that was administered and the response. Analysis of data was executed with the aid of percentages and weighted mean score (WMS).

5. Result and Discussion

Table 2 shows responses to the question of the town becoming safe in the last couple of months after the advocacy study was conducted.82% % of the respondents agreed that for some months now their towns are becoming safe. This is strongly agreed by 11% of respondents. Though there was an incident when banks closed down for nearly a week in some towns due to the security report of a planned robbery attack, thereafter, tension reduced and  banks opened to render service to the public. However, the total percentage of respondents that had a contrary view was 7% (disagreed and strongly disagreed).

 

6. Summary, Conclusion and Recommendation

People are continuously engaged in one activity or the other so as to meet their daily needs. In this process, either directly or indirectly, they are involved in business. This is because these activities are essentially designed to satisfy our unlimited wants. Therefore, business has become part and parcel of human existence in Kogi state particular and Nigeria and the global world in general. Undisputable, business needs a conducive environment to thrive. Kogi state is blessed with both human and material resources that can adequately provide this conducive environment. But unfortunately, the insecurity have made business environment in the state unfriendly for existing and prospective businessmen as evidence in previous study.

Findings from this study reveals that a high percentage of respondents agreed that for some months now their towns are becoming safe. However, a reasonable number of respondents felt that the fear of insecurity is still making investment unattractive to some business people in their towns and some business enterprises that closed down in their towns have still not re-opened.

Though physical security measures have been heightened in towns as agreed by a high percentage of respondents but no new infrastructure has been put in place to create the enabling environment for business to thrive again. This study argues for the need to overhaul existing infrastructure as well as provide some new ones. As such, government should increase and improve power generation capacity to ensure that electricity is regularly supplied to every nook and cranny of the state. Major cities should have functional street lights. This will attract investors and assure them of good and profitable business and investment. Similarly, minor and major roads in the state should be repaired for effective movement of goods from one place to the other so as to enhance safe and quick delivery of goods and services.

The state government should continue to heighten security. Security is very important to human existence and business activities cannot be carried out in an environment that is not secured. Government should assure the existing and prospective businessmen of protection of lives and properties by putting adequate security in place. Fear of being attacked by unknown groups at any point in time must be erased from people’s mind and psyche particularly, the potential investors.

Government should continue to heighten security. Security is very important to human existence and business activities cannot be carried out in an environment that is not secured. Government should assure the existing and prospective businessmen of protection of lives and properties by putting adequate security in place. Fear of being attacked by unknown groups at any point in time must be erased from people’s mind and psyche particularly, the potential investors.  

Business organizations must be socially responsible by extending assistance to security agencies and embarking on other activities that can enhance security in the state.  Similarly, the private sector should continue to contribute generously to the newly launched Kogi State Security Trust Fund.

The civil society and the media should intensify their effort at raising public awareness, awakening society to the disastrous effects of insecurity and getting across the message that fighting insecurity is possible. Individuals on their own need to continually cultivate the habit of security consciousness and to report any security situation to the appropriate authority immediately.

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About the Authors

Emmanuel Okokondem Okon
Department of Economics Kogi State University Anyigba, Kogi State, Nigeria

Corresponding Authors

Emmanuel Okokondem Okon