Data from a Nigerian startup shows terror is rescinding in its troubled north

Why do people stay in hotels? Vacation, business trip or ‘pleasure trip’ come to mind. But no one really does all of that in a region where jihadists attack at every opportunity. Boko Haram militants have killed more than 20,000 people since its violent campaign began in 2009; most of the attacks were carried out in Nigeria’s north east region. But the once deserted region is bubbling back to life again with hotel bookings in the region growing at an incredible pace.

One by one, businesses that have left the region are returning. The local football league side El Kanemi Warriors of Maiduguri, the epicenter of the militancy, now play home games in the city — for two years, they hosted games in Kano and Katsina following security concerns. Airlines that halted flights into cities in the north east region have also resumed. Although there are still isolated attacks, the efforts of the Nigerian government in ending insurgency in the country’s north is paying off.

According to data from Nigeria’s hotel booking site, number of hotel rooms booked in Nigeria’s north east rose by 48 percent in the half of 2016, laying credence to increasing business and tourism activities in the region.

Nigeria’s President Muhammadu Buhari, ahead of his election, had promised to rid the northeast region of Boko Haram insurgency. Although, the militants still successfully carry out attacks once in a while, their activities in the northeast region have been significantly depleted.

With millions of redevelopment dollars expected to go to the region over the coming years, business activities will gather more pace and will record even much bigger numbers from the northeast.

There’s down time down south

While there was a significant rise in the number of hotel rooms booked in the northeast, bookings in the South – one of the most prolific hotel booking quadrants in the country – reduced by 7 percent. This is not supposed to be alarming, considering the economic situation in the country.

Nigeria’s economy contracted by 0.4 percent in the first quarter of 2016. Inflation also rose to 15.6 percent in May, increasing for the seventh month in a row. In other words, the economy did not grow in the first quarter, yet things got costlier. Many companies, families, as well as individuals, therefore cut costs. This cost-cutting measure is believed to have affected hotel bookings too, hence, the 7 percent dip recorded in the first half of the year. But one factor that should not be missed is the increasing rate of insecurity in the south. Over the past few months, militant groups have been emerging in Nigeria’s oil-rich southern region. Thus, insecurity has increased in the region. This can also be seen as partly responsible for lower hotel bookings in the region. The Niger Delta Avengers which has been destroying oil installations in the region claims it has successfully crashed Nigeria’s crude production to 800,000 barrels a day from 2 million barrels a day.

As a drop in hotel bookings in the south reminds us of the effect of NDA attacks in the Niger Delta, it also reminds us of how the attacks could be good news for other oil-dependent nations like Venezuela. If militant attacks (which have now subsided) continued, a reduction of more than 1 million barrels a day of crude oil could accelerate the global ‘supply demand rebalancing’ process and lead to increase in oil prices.

Many expect Nigeria’s economy to rebound, especially with the adoption of a flexible exchange rate policy by the central bank. Holding the exchange was seen to have largely contributed  to lower economic activities in the first quarter. With improvement in the economy, reduction in militant activities and improved focus on developing the tourism industry, hotel bookings in the south will rebound.