Nigerian Airstrikes: A Geopolitical Minefield for Investors in Emerging Markets

The escalating use of military airstrikes in Nigeria's northwest has become a stark reminder of the fragility of regional stability—and a critical warning for investors navigating emerging markets. As civilian casualties mount, geopolitical risks are intensifying, deterring foreign capital from infrastructure projects while exposing ESG liabilities for companies operating in the region. For investors, this is not just a humanitarian crisis but a financial reckoning. Here's why the stakes are rising, and where to position for risk-adjusted returns.

The Geopolitical Toll: Why Infrastructure Investments Are Stalling

Nigeria's military has conducted over 150 airstrikes in the northwest since 2022, targeting bandit groups and insurgents. While these operations aim to curb violence, they've caused hundreds of civilian deaths. A December 2023 airstrike in Kaduna state killed at least 85 people, including women and children, while a January 2025 strike in Zamfara state mistakenly targeted vigilante groups, killing 20. These incidents reflect systemic failures in targeting and accountability, eroding trust in local governance and deterring foreign direct investment (FDI).

The NGX has underperformed global infrastructure benchmarks by 15% since 2022, with sectors like construction and energy seeing delayed projects. Investors are wary of funding roads, power grids, or mining operations in unstable regions, where supply chains risk disruption and reputational damage looms large.

ESG Liabilities: The Human Cost of “Business as Usual”

Civilian casualties aren't just a moral failing—they're a liability. The International Criminal Court (ICC) has flagged Nigerian military actions as potential war crimes, while Amnesty International reports over 200 civilian deaths from airstrikes in the northwest since 2022. Investors in sectors like oil, mining, or agribusiness face ESG scrutiny if their operations rely on regions where human rights violations are rampant.

• Reputational Risk: Companies linked to Nigerian government contracts or infrastructure in conflict zones may face ESG downgrades, deterring institutional investors.
• Legal Exposure: Lawsuits under the Alien Tort Statute or E.U. regulations could penalize firms complicit in human rights abuses.

Nigerian companies' ESG scores lag peers by 20%, with infrastructure firms like Dangote Cement and First City Monument Bank under pressure to disclose risk-mitigation strategies.

Opportunities in Conflict Resolution: Tech as the New Safe Haven

The crisis has created a niche for investors in geopolitical risk mitigation technologies, which could profit from Nigeria's push for accountability.

1. Drone Surveillance & Precision Tech: Companies like Maxar Technologies (NYSE: MAXR) or Palantir (NYSE: PLTR) provide tools to improve targeting accuracy, reducing civilian harm.
2. Security Sector Reform: Firms offering training in international humanitarian law (IHL) or accountability frameworks—such as Mercy Corps or Crown Agents—could see demand for contracts with Nigerian security forces.
3. ESG Compliance Platforms: Startups like Sustainalytics or B Lab offer risk-assessment tools for investors navigating ESG pitfalls in volatile markets.

Sectors to Avoid: The Cost of Overexposure

Investors must tread carefully in sectors deeply tied to regional stability:

• Real Estate: Commercial projects in states like Zamfara or Katsina face evacuation risks.
• Agriculture: Farming in the northwest—critical for Nigeria's food security—is vulnerable to bandit raids and military overreach.
• Energy: Gas pipelines and solar farms in unstable areas may see sabotage or operational halts.

Conclusion: Prioritize ESG, Hedge with Tech

Nigeria's northwest is a microcosm of the risks in emerging markets: where geopolitical instability and ESG liabilities collide. For investors, the path forward demands strategic caution and innovation.

• Act Now: Divest from sectors reliant on regional stability.
• Invest in Solutions: Allocate capital to tech firms mitigating conflict risks.
• Demand Transparency: Push for ESG disclosures from companies operating in volatile zones.

The stakes are clear: in Nigeria, ignoring geopolitical realities is a recipe for financial loss. The future belongs to those who address the root causes of instability—and profit from the solutions.

As defense budgets soar, infrastructure projects languish—a reminder that peace is the ultimate prerequisite for growth.