Nigeria’s economy stands on the shoulders of a silent workforce: the private security sector. Over 90 percent of Nigeria’s GDP assets, worth more than $218 billion, are protected by Private Security Companies (PSCs). Yet despite this indispensable role, the sector remains poorly regulated and disconnected from strategic economic planning.
According to the National Bureau of Statistics, Africa’s fourth-largest economy was valued at $252 billion in 2024 and is projected to reach $450 billion in 2025. Much of this wealth depends on assets safeguarded by over 1,100 licensed firms employing more than one million corporate guards.
Beyond this, an estimated two million unlicensed guards operate informally, whilst over 750 unlicensed operators function outside regulatory frameworks. Combined with seven hundred thousand government security personnel, the entire security industry employs over four million Nigerians—one of the nation’s largest employment sectors.
The capacity paradox
The millions employed in security belie Nigeria’s deteriorating security situation. Despite this massive workforce, Nigeria ranks 148th out of 163 countries on the 2025 Global Peace Index, behind war-ravaged nations. This paradox reveals a fundamental misalignment between current capacity and potential impact.
The issue isn’t personnel shortage but policy dysfunction. When over two million guards operate outside formal frameworks, they lack standardised training, coordinated intelligence-sharing, and integration with broader security strategies. This fragmentation creates duplicated efforts, inconsistent standards, and poor information flow between sectors.
Policy misalignment also distorts economic incentives. Licensed operators investing in training and compliance face unfair competition from unlicensed entities operating at lower costs.
This race to the bottom stunts professional growth, discourages innovation, and limits financing access. The result: an industry contributing below 0.1 per cent to GDP despite protecting over 90 per cent of GDP assets.
Current regulatory tools limit authorities to addressing symptoms rather than providing strategic impetus for scaling. The prevailing posture regiments the private sector through compliance oversight rather than implementing reforms that fuel innovation.
This constraint stems largely from the absence of a dedicated industry commission to align federal policies with sector potential.
South Africa’s transformation blueprint
South Africa demonstrates how comprehensive reform unlocks exponential growth. Facing similar challenges in the early 2000s, fragmented industry, unregistered operators, limited state integration, South Africa passed the Private Security Industry Regulation Act (PSIRA) in 2001. This established a robust regulatory authority with clear enforcement powers, mandatory registration and training, integrated databases linking private security with law enforcement, and provisions for armed response under strict oversight.
Within a decade, South Africa’s private security industry grew from approximately $8 billion to over $26 billion, becoming Africa’s largest. The reform catalysed innovation, with South African firms becoming regional leaders in biometric access control, drone surveillance, AI-powered threat detection, and integrated command systems. Today, South African PSCs export services across Africa whilst employing over 600,000 registered personnel.
Nigeria’s licensed private security sector of over one million guards already possesses nearly double South Africa’s entire registered workforce. If Nigeria’s regulatory framework were modernised with similar tools, formalising even half the informal sector could add $5–10 billion to GDP within five years, whilst dramatically improving security outcomes.
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Export potential in an unstable region
In an increasingly anarchical sub-Saharan Africa, Nigeria’s security industry holds significant untapped export potential. Regional demand for professional security services, technology solutions, and trained personnel presents strategic opportunities that should be reform’s primary focus.
South African firms dominate regional exports because their regulatory framework enables scaling, innovation, and international competition. Nigerian firms remain largely confined domestically despite possessing comparable human capital and market understanding—constrained by outdated regulations and lacking coordinated government support.
An industry-focused re-engineering could transform this by developing export promotion strategies, facilitating technology transfer, coordinating with diplomatic missions to open regional markets, and establishing quality standards, enhancing Nigeria’s competitive position. If even a quarter of the informal workforce were formalised and professionalised, Nigeria could field a private security sector larger than most African nations’ combined military and police forces.
The reform agenda
The 1986 Private Guard Companies Act, crafted in a pre-digital era, requires comprehensive modernisation. Priority reforms include:
– Updated legislative authority reflecting modern threats—cybersecurity, drone surveillance, AI-assisted monitoring
– Enhanced enforcement capacity to formalise two million unlicensed guards and eliminate 750 unlicensed operators
– Structured collaboration frameworks between PSCs and state agencies for intelligence sharing and crisis coordination
– Regulatory provisions for specialised services, including controlled armed protection of critical infrastructure
– Fiscal incentives for AI, IoT devices, drone surveillance, and cloud-based command systems
– Security Technology Innovation Fund to nurture research and development in indigenous surveillance and analytics solutions
The path forward
As of October 2025, Nigeria’s GDP stands at N372.8 trillion ($243.3 billion), with services contributing 58.04 percent and non-oil accounting for 94.43 percent. As the economy diversifies, safeguarding expanding assets, from fintech to logistics and telecoms, requires a robust, technology-enabled security ecosystem.
The private security sector has proven its capacity to scale and absorb employment. What’s needed now is updated legislative authority and institutional frameworks enabling both effective regulation and strategic industry development. This requires establishing an industry commission to align policy with potential, facilitate the formalisation of informal operators, and position Nigerian firms for regional market leadership.
If Nigeria hopes to achieve its $1 trillion economy target, it must address the foundational challenge of security—not only strengthening regulatory oversight but transforming the sector from an informally structured necessity into a professionally managed pillar of national stability and economic growth.
The framework exists; what’s required is political will to modernise it and institutional capacity to execute a comprehensive transformation.
The security industry has significant potential to contribute more substantially to Nigeria’s economy and stability. Realising this potential requires comprehensive reform addressing both regulatory gaps and strategic development needs.
Adekoya is the CEO of PR24 Nigeria Limited. He is a visionary security thought leader and dynamic business executive with over 18 years of experience leading high-performing teams in security operations and enterprise risk management across Africa. He is a co-founder of HIC Telematics, Aquiline Technology, and Aquiline Consulting. With a robust multisector background, Adekoya specialises in corporate security, protective intelligence, geopolitics, and defence consulting.
