




































American Economic & Social Review; Vol. 2, No. 1; 2018  

ISSN 2576-1269   E-ISSN 2576-1277  

                                                      Published by Centre for Research on Islamic Banking & Finance and Business 

 

 

 

20 

Nigeria: Does Terrorism Spring from Economic Conditions? 

Emmanuel O. Okon1 

1Department of Economics,  Kogi State University, Anyigba, Kogi State, Nigeria 

Correspondence: Department of Economics,  Kogi State University, Anyigba, Kogi State, Nigeria, E-mail: 

tonydom57@yahoo.com. Tel: +2348023275716  

 

 

Received:  January 2, 2018                  Accepted: January 8, 2018                   Online Published: January 13, 2018   
 

 

Abstract 

Over the last half-century, Nigeria has become one of Africa‟s three giants along with Egypt and South Africa, 

thereby gaining considerable clout on the regional and global arenas. It is Africa‟s largest oil producer and recent 

finds ensure Nigeria‟s significance in the energy market for the foreseeable future. But the country has an inability 

or an unwillingness to distribute economic resources and development programs equitably. The primary objective of 

this paper is to find out whether economic condition leads to domestic terrorism in the country, as the contemporary 
Nigeria society is engulfed by terrible acts of Terrorism. This paper uses annual data for the time period 1970-2016 

and the multivariate regression results suggest that government expenditure hinders terrorism, whereas 

macroeconomic policies foster it. Possible reasons for the outcomes and the policy implications of the findings were 

discussed. 

 

Keywords: Terrorism, Economic Deprivation, Nigeria. 

 

1. Introduction  

Nigeria is Africa‟s most populous country and the 9th most populous country in the world. With an estimated 

population of 150 million, one in every five Africans is a Nigerian (UNICEF Nigeria, 2007).The country has been 

undergoing explosive population growth and has one of the highest growth and fertility rates in the world. By UN 

estimates, Nigeria will be one of the countries responsible for most of the world's total population increase by 

2050.Nigeria is home to four large ethnic groups: Fulani, Hausa, Igbo and Yoruba and there are as many as 350 

languages spoken across the country. The country has a federal system of administration with a Federal Capital 

Territory (FCT), 36 States and 774 Local Government Areas.  

Nigeria has one of the fastest growing economies in the world. Petroleum and oil resources play a large role in the 

Nigerian economy. The country is the 6th largest producer of petroleum in the world; it is the 8th largest exporter and 

has the 10
th

 largest proven reserves (UNICEF Nigeria, 2007). While the revenues made from oil provide the largest 

source of income for Nigeria, the country has become overly-dependent on its oil sector whereas other areas of the 

economy such as agriculture, palm oil production and coconut processing are in decline. Nigeria possesses a stark 

dichotomy of wealth and poverty. In spite of the country‟s vast oil wealth, the majority of Nigerians are poor with 

71 per cent of the population living on less than one dollar a day and 92 per cent on less than two dollars a 

day(UNICEF Nigeria, 2007).Although the country is rich in natural resources, its economy cannot yet meet the basic 

needs of the people. Such disparity between the growth of the GDP and the increasing poverty is indicative of a 

skewed distribution of Nigeria‟s wealth (UNICEF Nigeria, 2007). 

Terrorism in Nigeria is going out of hand. Nigerians are generally religious inclined, hence the multiplicity of 

religious groups in the country, which in itself testifies to the sociopolitical and economic diversity of the Nigerian 

society (Naijagist, 2012). The main objective of this paper is to find out whether economic deprivation leads to 

terrorism in Nigeria, consequent on that, suggestions to reduce the incidence of terrorism can be made. Empirical 

studies investigating the root causes of terrorist incidents generally employ traditional cross sectional analysis, 

implicitly assuming the same economic, social and political environments for countries under consideration. This is 

a highly restrictive assumption and may result in heterogeneity bias. Resorting to country studies rather than cross-



www.cribfb.com/journal/index.php/aesr                       American Economic & Social Review                    Vol. 2, No. 1; 2018 

 

 

21 
 

country analysis may overcome such a heterogeneity bias. As such, following the introductory section, Section 2 of 

this paper provides some stylize facts on the economic situation of Nigeria and level of terrorist activities. A review 

of related literature is presented in Section 3. The methodology of the study is discussed in Section 4. An 

econometric analysis is presented in Section 5 while Section 6 presents the summary, conclusions and policy 

implications. 

2. Economy of Nigeria and Terrorism: Facts And Figures 

2.1 Overview of the Economy 

Nigeria‟s GDP (1990 constant price) rose from N9.9 trillion in 2003 to N18.6 trillion in 2007(Anyanwu, 2008).  It 

was the 49th largest economy in the world in 2006 (Anyanwu, 2008). Table 1 shows the structural changes that have 

taken place since 1960.Overall; there was remarkable improvement in the economy in the nine years period, 

following the extensive reforms that were carried out by the government.   Agricultural and oil production accounted 

for 65.8 per cent of the GDP in 2007(Anyanwu, 2008).  Services, wholesale and retail trade, manufacturing, and 

building and construction accounted for 16.2, 16.2, 4.0 and 1.7 per cent, respectively (Anyanwu, 2008). The 

economy could therefore be regarded as agrarian and primary in nature. From the early 1970s, there was a shift from 

agrarian monoculture to dependence on another primary commodity – petroleum (Also, see Figure 1 for the 

structure of GDP) 

Data from the National Bureau of Statistics indicated that the average inflation rate, year on year, averaged 24.4 per 

cent for the decade 1980-1989; rising to 30.2 per cent over the following decade, 1990-1990; but fell sharply to 13.1 

per cent during 2000-2007(Anyanwu, 2008).  Indeed, inflation rate fell persistently from 2004, recording single digit 

in 2006 and 2007.   The deceleration in inflation has been attributed to the fiscal restraint adopted by the Federal 

Government, tight monetary policy and good agricultural harvest, resulting from good weather conditions and the 

various agricultural initiatives of the government. See Table 2 for average growth rate of selected macroeconomic 

indicators for the period. 

Table 1: Structural Change in  GDP, 1960-2007  

 1960 1970 1981 1990 2000 2003 2004 2005 2006 2007 

Agriculture 64.1 47.6 33.6 37.9 42.7 41.0 41.0 41.2 41.7 42.2 

Manufacturing 4.8 8.2 5.6 4.5 3.4 3.6 3.7 3.8 3.9 4.0 

Crude Oil 0.3 7.1 29.2 30.6 26.0 26.5 25.7 24.2 21.8 19.4 

Building & 

Construction 

NA NA 4.1 1.6 2.0 1.4 1.4 1.5 1.6 1.7 

Wholesale & 

Retail 

NA NA 13.9 13.4 13.1 12.6 12.9 13.8 15.0 16.2 

Services NA NA 9.8 8.2 11.2 12.3 14.7 15.2 15.7 16.2 

 

NA   = Not Available   Source: CBN Annual Report, Various Issues 

Source: Anyanwu(2008). 

 

 

 



www.cribfb.com/journal/index.php/aesr                       American Economic & Social Review                    Vol. 2, No. 1; 2018 

 

 

22 
 

 

Source: Anyanwu(2008). 

Figure 1: Structure of GDP, 1960-2007 

  Table 2: Growth Rate of Selected Macroeconomic Indicators 

Year Growth 

Rate of 

Real GDP 

Inflation  

(Y-O-Y) 

Growth Rate 

of Index of 

Agric Prod. 

Capacity 

Utilization 

Average (1980-1989) 2.2 24.8 7.2 45.0 

Average (1990-1999) 3.0 30.2 4.4 35.1 

Average (2000-2007) 6.2 13.0 4.9 46.4 

Source: Anyanwu (2008) 

The Nigerian economy slowed down from 7.4% growth in 2011 to 6.6% in 2012 (AEO, n.d.). The oil sector 

continues to drive the economy, with average growth of about 8.0%, compared to -0.35% for the non-oil sector 

(AEO, n.d.). Agriculture and the oil and gas sectors continue to dominate economic activities and Nigeria. The fiscal 

consolidation stance of the government has helped to contain the fiscal deficit below 3.0% of gross domestic product 

(GDP)(AEO, n.d.). This, coupled with the tight monetary policy stance of the Central Bank of Nigeria (CBN), 
helped to keep inflation at around 12.0% in 2012 (AEO, n.d.). The outlook for growth remains positive (see Table 3 

for estimation of macroeconomic indicators for 2012 and projections for 2014). Short- and mid-term downside risks 

include security challenges arising from religious conflict in some states, costs associated with flooding, slower 

global economic growth (particularly in the United States and China) and the sovereign debt crisis in the euro area. 

The economic growth has not translated into job creation or poverty alleviation. Unemployment increased from 21% 

in 2010 to 24% in 2011 because the sectors driving the economic growth are not high job-creating sectors (the oil 

and gas sector, for example, is a capital intensive “enclave” with very little employment-generating potential)(AEO, 

n.d.). 

Table 3: Macroeconomic indicators 2011- 2013 

 

 

 

           

 

 

      

Note: Figures for 2012 are estimates; for 2013 and later are projections. 

Source: AEO (n.d.)  

2.2. Terrorism 
 Nigeria, like many nations in Africa, is not in short supply of groups and associations agitating for one thing or the 

other. Historically, three waves of such groups are discernible in Nigeria. The first of such groups existed even 

before colonial rule. They were the age-grades, guild associations and special interest groups performing one 

function after another in the overall engineering of their respective polities (Oyeniyi, 2013). Examples include 

Ndinche, Modewa, Aguren, Eso, Akoda and Ilari and so on. The second wave relates to groups, essentially based on 

kinship affinity, with presence in every part of Nigeria, including the northern region, Fernando Po, and the Gold 

Macroeconomic indicators  Years 

 2011 2012 2013 2014 

Real GDP growth 7.4 6.6 6.7 7.3 

Real GDP per capita growth 4.9 4.1 4.2 4.8 

CPI inflation 10.9 12 9.7 9.5 

Budget balance % GDP -0.1 3.7 4.4 5.7 

Current account % GDP 3.2 10.4 11.8 14.6 



www.cribfb.com/journal/index.php/aesr                       American Economic & Social Review                    Vol. 2, No. 1; 2018 

 

 

23 
 

Coast. As Coleman had noted, such groups were formed as people began moving from one area to the other in 

search of colonial jobs. As ethnic associations, they were based on strong loyalty and obligation to their kinship 

group, towns or villages. These associations were the „organizational expression of strong persistent feeling of 

loyalty and obligation to the kinship group, the town or village where the lineage is localized‟.  Examples include 

the Calabar Improvement League, Owerri Divisional Union, Igbira Progressive Union, Urhobo Renascent 

Convention, Naze Family Meeting, Ngwa Clan Union, Ijo Rivers People‟s League, Ijo Tribe Union, etc (Oyeniyi, 
2013). 

The third wave comprises of groups such as the O‟Odua Peoples‟ Congress(OPC), Arewa Youth Consultative 

Forum, Movement for the Actualization for the Sovereign State of Biafra, Anambra State Vigilante Service, Abia 

State Vigilante Service, Imo State Vigilante Service, Niger-Delta Volunteers Force, Ogoni Youth, Ijaw Youth, 

Bakassi Boys, Egbesu Boys, Onitsha Traders Organization and Mambilla Militia Group (Oyeniyi, 2013).Several 

factors underlie the growth and development of groups of the third wave. Economic recession of the 1980s, falling 

commodity prices, OPEC price increases, privatization, economic liberalization, deregulation, currency devaluation, 

Cold War politics, trade barriers, civil conflict, etc. are some of the notable examples. These myriads of problems 

reduced government‟s ability to fund welfare projects. The impact of these policies ranged from job cuts, high 

inflation rates and unemployment to a burgeoning informal sector(Oyeniyi, 2013). 

More recently, the activities of militant Islamist sects, or at best evolving terrorist groups, in northern Nigeria is now 

a growing source of security concern to Western capitals. Hitherto driving much of the attention is the ramping up of 

violent attacks on diverse civilian and military targets in Nigeria by the Jama‟atuAhlissunnahlidda‟awatiwal Jihad, 

or the Boko Haram, using such violent tactics like placement of improvised explosive devices (IEDs), targeted 

assassination, drive-by shooting and suicide bombing (see Tables 4, 5, and 6 in Appendix). 

 

Images of terrorist attacks in Nigeria 

Source: Gstatic.com (n.d);Kio-Lawson and MajekodunmiIn (2011) 

3. Review of Related Literature 

Enders and Sandler (1993, 1999 and 2000) define terrorism as the premeditated use or threat to use violence by 

individuals or subnational groups against noncombatants to obtain political and social objectives through the 

intimidation of a large audience beyond that of immediate victims. Empirical studies investigating the economic 

impact of terrorist incidents generally report that terrorist activities affect economic growth through various 

channels: It may lead to an increase in military expenditures (Eckstein and Tsiddon, 2004); an increase in production 
and transaction costs (Frey et al. 2007); a decrease in tourism revenues (Enders et al. 1992; Yechiam et al. 2005); a 

decrease in savings (Fielding 2003) and a decrease in foreign direct investment (Fielding 2004). Thus it is important 

to reveal the determinants of terrorism in order to be able to draft counter-terrorist measures (Yildirima, Öcalb and 

Korucuc, 2010). 

Existing studies trying to investigate the determinants of terrorism agree that terror can originate more easily in 

economically and politically under-developed countries and / or provinces (Yildirima, Öcalb and Korucuc, 2010). 

Several studies have already investigated the economic roots of terrorism. Considering the supply side of terrorism, 

Berrebi (2003) finds that high standards of living and educational levels are positively associated with participation 

in Hamas and Palestinian Islamic Jihad (PIJ) terrorist activities in Israel. Krueger and Maleckova (2003) …find that 

the connection between poverty, education and terrorism is indirect, complicated and probably quite weak. A few 

studies on international terrorism …find that economic development and social welfare policies are important 
determinants terrorism (Burgoon, 2006; Li and Schaub, 2004; Li 2005). 

Several cross-country studies have shown that terrorism has no economic roots. Among these studies the most 

influential ones are Abadie (2004) and Krueger and Laitin (2007). Abadie (2004) shows that terrorist risk is not 

significantly higher in poor countries when we control for political freedom. The terrorist risk data used by Abadie 



www.cribfb.com/journal/index.php/aesr                       American Economic & Social Review                    Vol. 2, No. 1; 2018 

 

 

24 
 

(2004) includes information on the country of occurrence but not on the target countries and on the countries of 

origins of terrorism. Therefore the data confounds between different types of terrorism (Derin-Gürey, 2009). 

The subject of this paper is domestic terrorism in Nigeria; the perpetrators, victims, locationand nation match. The 

violence, in other words, concerns matters within the nation. Yet, literature is not able to say categorically whether 

economic deprivationsexplain terrorism and empirical testing is largely absent or severely limited. Domestic 

terrorism is by far the more common phenomenon (Enders, et al. 2011; Feldman and Ruffle, 2008; Kis-Katos, et al. 
2011; Merari, 1999; Piazza, 2011; Sanchez-Cuenca and De la Calle, 2009) in Nigeria. Ironically, it is the least 

empirically studied. The purpose of this paper is to contribute to rectifying this shortcoming. 

4. Research Design and Strategy 

Research design is the structure and strategy for investigating the relationship between the variables of the study. 

The research design adopted combines the theoretical  consideration with empirical observation. It enables us 

therefore to observe the effects of explanatory variables on the dependent variables 

4.1Research Domain 

This investigation about economic deprivation  leading to terrorism was conducted in Nigeria. The data spans the 

period 1970 to 2016 (46years). The data from this period present a considerable degree of freedom that is necessary 

to capture the net effect of explanatory variables on the dependent variables.  

4.2 Data Sources 

Secondary data were used for this study. The choice of these secondary sources is based on their authenticity and 
reliability. The data were obtained from the publication of Central Bank of Nigeria, websites, journals and 

newspapers. In examining the data, the line graphs for the variables are presented in Figure 2 (see Appendix) and 

their descriptive statistics are shown in Table 7 in Appendix. The correlation matrix of the variables is shown Table 

8 (see Appendix). 

4.3 Data Processing Technique 

To test for stationarity of the data, a general form of Augmented Dickey Fuller (ADF) (Dickey and Fuller 

1979, 1981) regression is formed below: 

  ∆yt = β yt-1 +  𝑚
𝑘=0  αi∆yt-i +Φ + ʎt + εt…………..(1) 

Where ∆y is the first difference of the series, mis the lag length,t is a time trend, εt is a white noise residual. The 

ADF test is carried out by using the null hypothesisasH0 :α2  = α3 = 0. The lag length used is relatively small to 

savedegrees of freedom and large enough to avoid the existence of autocorrelation inthe residual. 

4.4. Technique of Analysis 

The method of study in this paper is both descriptive and analytical. The descriptive tools consist of the use of table 

and percentages. The analytical tool used is the ordinary least square regression analysis. The OLS method is based 

on some assumptions (Gujarati, 2003) which make the OLS estimators to become Blue (Best linear Unbiased 

Estimator). Some of the short comings of the OLS method include the fact that while some of its assumptions are 

unrealistic (such as no autocorrelation, homoscedasticity and no multicollinearity); a single model as well cannot 

fully satisfy all the assumptions at a time. Also, no single test can solve all the problems of this method at a time. 

Moreover, the OLS method cannot be applied to purely non-linear models such as ones that are non-linear in 

parameter.  

As a result of some of these short-comings, we use the OLS method but correct the standard errors for 

autocorrelation by a Newey-West method. The corrected standard errors are known as HAC (Heteroscedasticity –

and autocorrelation-Consistent) standard errors or simply as Newey-West standard errors. To account for serial 

correlation, autoregressive (AR) term was also introduced. 

5. Estimation Model 

The model was developed to access the effect of economic variables on terrorism in Nigeria between 1970-2016. To 

achieve robust statistical analysis, potential economic predictors of terrorism such as inflation rate, GDP per capita, 

trade openness of the economy, government total expenditure, interest rate and policy index were included in the 

model. The specification is therefore given as: 

TERR = ƒ(GDPC, OPEN, INFL, GOVX, INTR, POLX)       ………..(2) 

Equation(1) can be operationalised for the purpose of estimation into the following equations: 

TERR = ɲ0+ɲ1GDPC  +ɲ2OPEN +  ɲ3INFL +ɲ4GOVX +ɲ5INTR +ɲ6 POLX +   ȹt…..(3) 

 Where TERR is a dummy variable which takes the value of 1 if terrorist attack occurs in a year and 0 if otherwise, 

GDPC is per capita GDP, INFL is inflation rate, OPEN is an indicator variable for trade openness,GOVX is 



www.cribfb.com/journal/index.php/aesr                       American Economic & Social Review                    Vol. 2, No. 1; 2018 

 

 

25 
 

government total expenditure, INTR is interest rate, POLX is index of economic policy,ɲ0 is a constant term, ɲ1…ɲ5 

are coefficients that will be estimated empirically and ȹis white noise, which is common to all econometric models 

given that by their nature, they are non-deterministic. Most of the variables in the above equation are transformed 

into logarithm to facilitate easy estimation. The behavioral assumptions are stated as follows: ɲ1< 0, ɲ2< 0,ɲ3> 

0,ɲ4< 0, ɲ5>0 ,ɲ6< 0 

Using the number of terrorist attacks per year or the number of victims per incident as dependent variable is quite 

common in terrorism research as this reflects more accurately the magnitude of terrorism risk. Due to issues of data 
availability and reliability, the dependent variable used in this paper is the occurrence of terrorism (TERR) and it is 

based on the chronological data on terrorism incidents in Nigeria. The variable is constructed using binary. It takes 

the value of 1 if terrorist attack occurs in a year and 0 if otherwise. The information about the underlying distribution 

of TERR is shown in the kernel density in Figure 3(see Appendix). 

Concerning the independent variables, it is believed that economic development measured by GDP per capita 

(GDPC) reduces domestic terrorism. The openness variable measured as exports plus imports divided by GDP (X + 

M / GDP) is used as proxy for the level of trade between the economy and the rest of the world. The degree of 

openness (OPEN) is commonly assumed to be a channel of economic growth; it indirectly reduces terrorism within a 

country. Therefore it is expected to have the same sign of GDP per capita. Inflation (INFL) denotes the average 

annual change in consumer price index. On one hand, it proxies changes in purchasing power of individuals which 

can affect the standard of living eventually leading to terrorism. The formulation of sound economic policies ensures 

the overall stability of the economy.  This necessitated the inclusion of policy index (POLX) as an explanatory 
dummy variable. It represents the different regimes and their policy stance. It takes the value of 0 for military rule 

and 1 for civilian rule.  It is a common belief that government plays a significant role in the development of a 

country. The implication is that an increase in government expenditure (GOVX) will yield a positive increase in the 

growth of the economy by increasing the national income, especially when it is injected in development programs 

(Omoke, 2009) liking providing public (utilities) goods such as roads, communication, power, education and health. 

This is expected to discourage terrorism. Interest rate (INTR) could increase the probability of terrorist activities 

through the negative relationship between with investments. That is a fall in investment as a result of high interest 

could bring about unemployment and poverty which could encourage terrorism. 

5.1 Empirical Result and Discussion 

From the Pairs wise correlation matrix in Table 8 in Appendix, terrorism (TERR) and interest rate showed a highly 

positive correlation of about 0.71. This is followed by a strongly positive movement between government total 
expenditure (GOVX) and policy index (POLX). Other variables exhibited moderately weak correlation in general. 

The results of unit root test are contained in Table 9 (see Appendix). The results show that all the variables are 

stationary at first difference (d(1)). 

Table 10 in Appendix contains the multivariate regression results of the basic model from equation 3. The results 

indicate that In the table, some of the presumptive signs were correct apart from the log of GDP per capita, log of 

openness of the economy to trade, interest rate (LOG(INTR) and policy index(POLX), which showed a positive sign 

instead of a negative sign. The results indicate that LOG (INFL)is statistically insignificant. With the exception of 

inflation variable, all the coefficients of the variables are statistically significant. However, there is serial correlation 

as indicated by a low Durbin-Watson statistic of1.445299. This necessitates the introduction of autoregressive (AR) 

term in the model and hence the estimation contained in Table 11 which will be the focus of the discussion. 

The R
2
0.911515 implies that 91.15 percent of total variation in terrorism is explained by the regression equation. 

Coincidentally, the goodness of fit of the regression remained high after adjusting for the degrees of freedom as 
indicated by the adjusted R2(R2=0.893298 or 8933%).The F-statistic 50.04, which is a measure of the joint 

significance of the explanatory variables, is found to be statistically significant at 1 percent as indicated by the 

corresponding probability value (0.000000). The Durbin-Watson statistic of 2.19 rules out autocorrelation. 

From Table 11(see Appendix), it can seen that the coefficients of LOG(INFL), LOG(GDPC), LOG(INTR), 

LOG(OPEN) are far from being statistically significant. The results show that government expenditure has an 

adverse effect on terrorism. In Nigeria, government expenditure has been on the rise owing to the huge receipts from 

production and sales of crude oil, and the increased demand for public (utilities) goods. With a negative and 

statistically significant coefficient, the result suggests that the increase in government total expenditure reduces 

terrorism. Unfortunately, the rise in government expenditure has not translated into meaningful growth and 

development, as Nigeria ranks among the poorest countries in the world (Sevitenyi, 2012). In addition, many 

Nigerians have continued to wallow in abject poverty, while more than 50 percent live on less than US$2 per 
day(Sevitenyi,2012).Couple with this, are dilapidated infrastructure (especially roads and power supply) that has led 



www.cribfb.com/journal/index.php/aesr                       American Economic & Social Review                    Vol. 2, No. 1; 2018 

 

 

26 
 

to the collapse of many industries, including high level of unemployment and abandoned elephant projects. As such 

the result should be taken with caution. 

Policy index variable has a positive and statistically significant relationship with terrorism. From 1960, when the 

nation gained independence, to 2013, Nigeria experienced about twenty-five years of civilian, as opposed to military 

rule. The government‟s policy stance in the macro economy shows that there has been considerable fluctuation and 

that some bad habits e.g., deficit budgeting have been persistent.    The implication of the result is that government 
policy stance ultimately affects the poverty level over the years. Invariably, terrorism in Nigeria is a direct 

consequence of the people‟s deep dissatisfaction with their government‟s macroeconomic policy. 

6. Conclusion and Policy Implication 

The primary objective of this paper is to find out whether economic condition leads to terrorism in the country, as 

the contemporary Nigeria society is engulfed by terrible acts of Terrorism. This paper used annual data for the time 

period 1970-2016 and employed Ordinary Least Square technique. The results suggest that government expenditure 

hinders terrorism, whereas macroeconomic policies foster it. This study has strong policy implications, suggesting 

that government should minimize policy inconsistency. Proper implementation and co-ordination of macroeconomic 

policy objective should be rigorously pursed since implementation of such policy is usually multidimensional and 

hence calls for effective co-ordination among the various government department, institutions and other relevant 

sectors. 

The proportion of government expenditure that goes into capital and recurrent expenditure financing should be 
increased since these components exert significant negative effect on terrorism. In the same vein, government should 

restructure its various organs of public administration in order to engender efficiency and effectiveness in service 

delivery. The infrastructures should be improved upon to aid economic growth. 

However, like any empirical study, this paper has some weaknesses associated with data. Data are not available on 

the number of terrorist attacks per year or the number of victims per incident especially in the 1970s and 1980s. As 

such, the paper was forced to construct a binary for the dependent variable. This very likely could have affected the 

results of the study. The findings should be interpreted as no more than a preliminary support of the idea that 

economic factors may play a role in encouraging/discouraging terrorism. While this paper offers some interesting 

results, further analyses might be wise by considering more advanced technique of analysis and inclusion of other 

economic, social, political variables. 

References 
Abadie, A.(2004). "poverty, political freedom, and the roots of terrorism", National Bureau of Economic Research, 

Inc., NBER Working Papers: No. 10859. 

Abimbola, J. O., and Adesote, S. A. (2012).“Domestic terrorism and Boko Haram insurgency in Nigeria, issues and 

trends: A historical discourse”. Journal of Arts and Contemporary Society, vol. 4. 11-29.

 http://www.cenresinpub.org/pub/Sept%20Edition%202012/JACS/Page%2011-19_842_.pdf  

AEO (African Economic Outlook) (n.d.).Nigeria-Overview. 

http://www.africaneconomicoutlook.org/en/countries/west-africa/nigeria/  

Anyanwu, C.M (2008). The role of monetary policy in achieving Nigeria‟s Vision 2020 agenda.A paper presented at 
the Retraining of Middle Level Civil Servants at NIPSS Kuru, near Jos, Plateau State, on July 27 to  August 

03. 

http://www.google.com.ng/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CCsQFjAA&

url=http%3A%2F%2Fwww.ecolabconsult.com%2Fcomponent%2Fsimpledownload%2F%3Ftask%3Ddow

nload%26fileid%3D%252Fdownload%252FMonetary%2BPolicy%2Band%2BVision%2B2020%2Bteamw

orkv2.doc&ei=-

R7gUY7MEIrQqgH_zoHABg&usg=AFQjCNEDLbDKbKkmJ4t4jAm7MDZNsNYWtw&bvm=bv.487056

08,d.aWM 

Berrebi, C. (2003). "Evidence about the link between education, poverty and terrorism among Palestinians", 

Working Papers 856, Princeton University, Department of Economics, Industrial Relations Section. 

Burgoon B. (2006). "On welfare and terror: Social welfare policies and political economic roots of terrorism", 

Journal of Conflict Resolution, 4(50), 176-203. 
Caruso, R., and Schneider, F. (2011).The socio-economic determinants of terrorism and political violence in 

Western Europe (1994-2007).European Journal of Political Economy,27(1),37–49. 

Chima, O. (2011). Sanusi: Why Nigerians must accept non-interest banking. 

http://www.thisdaylive.com/articles/sanusi-why-nigerians-must-accept-non-interest-banking/99500 

Derin-Gürey, P. (2009). Does terrorism have economic 

roots?http://www.imtlucca.it/_kbase/seminar_paper/006519_000245_.pdf 



www.cribfb.com/journal/index.php/aesr                       American Economic & Social Review                    Vol. 2, No. 1; 2018 

 

 

27 
 

Dickey, D.A., and Fuller, W.A. (1979). Distributions of the estimators for autoregressive time series with a Unit 

Root, Journal of the American Statistical Association, 74(1), 427 -431. 

 Dickey, D.A., and Fuller, W.A. (1981). Likelihood Ratio Statistics for Autoregressive Time Series with a Unit 

Root, Journal of the American Statistical Association, 74,(1), 426-435. 

DoubleGist.com (2013). An overview of Nigerian economy.http://www.doublegist.com/an-overview-of-nigerian-

economy/ 
Enders, W., and Sandler, T. (1993). “The effectiveness of antiterrorism policies: A vectorautoregression-

intervention analysis”. American Political Science Review, 87(4), 829-844. 

Enders, W., and Sandler, T. (1999).“Transnational terrorism in the post–coldwarera”.International Studies 

Quarterly, 43(1),145-167. 

Enders, W., and  Sandler. T. (2000).“Is transnational terrorism becoming more threatening? A time series 

investigation”.Journal of Conflict Resolution, 44(3), 307-332. 

Eckstein, Z., and Tsiddon, D. ( 2004). “Macroeconomic consequences of terror: Theory and the case of Israel”. 

Journal of monetary economics,51(5), 971–1002. 

Enders, W., Parise, G. F., and Sandler, T. (1992). “A time-series analysis of transnational terrorism: Trends and 

cycles”. Defense Economics, 3(4), 305-320. 

Enders, W., Sandler,T., and Gaibulloev, K. (2011). "Domestic versus transnational terrorism: Data, decomposition, 

and dynamics." Journal of Peace Research,48 (3), 319-37. 
Fielding, D. (2003).“Counting the cost of the intifada: Consumption, saving and political instability in Israel”.Public 

Choice, 116(3-4), 297-312. 

Fielding, D. (2004). “How does violent conflict affect investment location decisions? Evidence from Israel during 

the Intifada”.Journal of Peace Research, 41(4), 465-484. 

Feldman, N. E., and Ruffle, B. J.  (2008). "Religious terrorism: A cross-country analysis." In Economics of National 

Security, 1-32. Samuel NeamanInstitute, Haifa. 

Forest, J.J.F. (2012). Confronting the terrorism of Boko Haram in Nigeria. JSOU Report 12-5. 

http://cco.dodlive.mil/files/2012/09/Boko_Haram_JSOU-Report-2012.pdf 

Gstatic.com (n.d). Images.http://t1.gstatic.com/images?q=tbn:ANd9GcQtWU0HhRE6hHXpKTu-

hmb_PjBxdw4HYHjBA583Qfy89j3xFAgg 

Gujarati, D.N. (2003). Basic Econometrics. New York: McGraw Hill Book Co.  
Johansen, S., and Juselins, K. (1990). Maximum Likelihood Estimation and Influence on Cointegration with 

Application to Demand for Money, Oxford Bulletin of Economics and Statistics. 

Kio-Lawson, T., and MajekodunmiIn, I. (2011). The battle against “the new face of terrorism” in Nigeria: What 

weapons do we possess? Businessday 

newspaper.http://www.businessdayonline.com/NG/images/stories/9jaterror_320.jpg 

Kis-Katos, K.,  Liebert, H., and Schulze, G.G. (2011)."On the origin of domestic and international 

terrorism."European Journal of Political Economy, 27 (1),17-36. 

Krueger, A.B., and Maleckova, J. (2003). "Education, poverty, political violence and terrorism: Is there a causal 

connection?",Journal of Economic Perspectives, 17(4), 119-144. 

Krueger, A.B., and Laitin, D.D. (2007). "KtoKogo?: A cross-country study of the origins and targets of terrorism", 

terrorism, economic development, and political openness edited by Philip Keefer, Norman Loayza, 

Cambridge University Press. 
Li, Q. (2005). "Does democracy promote or reduce transnational terrorist incidents?" Journal of Conflict Resolution, 

49(2), 278-297. 

Li, Q., and Schaub, D. (2004)."Economic globalization and transnational terrorism: A pooled time-series analysis", 

Journal of Conflict Resolution, 48(2), 230-258. 

Merari, A. (1999). “Terrorism as a strategy of struggle: Past and future”.Terrorism and Political Violence ,11(4), 52-

65. 

NiajaGist.com (2013). Hezbollah terrorists camp found in Kano state Nigeria; Rocket propelled guns & dangerous 

ammunition recovered. http://naijagists.com/hezbollah-terrorists-camp-found-in-kano-state-nigeria-rocket-

propelled-guns-dangerous-ammunition-recovered/ 

Omoke P. (2009). “Government expenditure and national income: A causality test forNigeria”.European Journal of 

Economic and Political Studies, 2(1), 1-11. 
Onuoha, F. C. (2013).  Jama'atuAnsarulMusilimina Fi Biladis Sudan: Nigeria‟s evolving terrorist group. Report 

Aljazeeral Centre for Studies. 

http://studies.aljazeera.net/ResourceGallery/media/Documents/2013/3/14/2013314103734423734Nigerias

%20Evolving%20Terrorist%20Group.pdf 

http://www.doublegist.com/an-overview-of-nigerian-economy/
http://www.doublegist.com/an-overview-of-nigerian-economy/
http://studies.aljazeera.net/ResourceGallery/media/Documents/2013/3/14/2013314103734423734Nigerias%20Evolving%20Terrorist%20Group.pdf
http://studies.aljazeera.net/ResourceGallery/media/Documents/2013/3/14/2013314103734423734Nigerias%20Evolving%20Terrorist%20Group.pdf


www.cribfb.com/journal/index.php/aesr                       American Economic & Social Review                    Vol. 2, No. 1; 2018 

 

 

28 
 

Onwubiko, E. (2013). Corruption as 

terrorism.Guardian.http://www.ngrguardiannews.com/index.php?option=com_content&view=article&id=1

17753:corruption-as-terrorism&Itemid=730 

Owoye, O.  andOnafowora, O. A.  (2007). M2 targeting, Money Demand and Real GDP growth in Nigeria: Do rules 

apply?, Journal of Business and Public Affairs,1(2),1-

20.http://www.scientificjournals.org/journals2007/articles/1229.pdf 
Oyeniyi, B. O. (2013). Terrorism in Nigeria: Groups, activities, and politics. Academia.edu. 

http://academia.edu/327799/Terrorism_in_Nigeria_Groups_Activities_and_Politics 

Piazza, J. A.(2011)."Poverty, minority economic discrimination, and domestic terrorism."Journal of Peace Research 

,48(3),339-53. 

Sanchez-Cuenca, I., and De la Calle, L. (2009). "Domestic terrorism: The hidden side of political violence." Annual 

Review of Political Science, 12(1), 31-49. 

Sevitenyi, L. N. (2012). "Government expenditure and economic growth in Nigeria: An empirical investigation 

(1961-2009)". The Journal of Economic Analysis, 1(1), 38-51. 

UNICEF Nigeria (2007).The Nigerian situation.http://www.unicef.org/nigeria/1971_2199.html 

Yildirima, J., Öcalb, N., and Korucuc, N. (2010).Analysing the determinants of terrorism in Turkey using 

geographically weighted regression.http://www.ub.edu/sea2009.com/Papers/10.pdf 

Appendix 

Table 4: Attacks Blamed on the JAMBS 

Date Location Target(s) Description Remarks  

26 Nov. 2012 Garki, Abuja Headquarters of 

the Special Anti-

Robbery Squad 

(SARS) 

Attack and 

freeing of some 

inmates in the 

detention facility 

of the SARS 

headquarters 

JAMB claimed 

that the attack 

was in 

compliance with 

a Quranic 

injunction that 

urged believers 

to fight for the 

oppressed  

andthe feeble. It 
promised similar 

attacks against 

detention centres 

across the 

country 

 

19 Dec. 2012 Katsina State Francis Colump Kidnapping of 

Francis, a 

French citizen 

working for the 

French company 

Vergnet 

JAMBS claimed 

that the reason 

for kidnapping 

Colump is the 

stance of the 

French 

government and 

the French 
people on Islam, 

specifically 

citing France‟s 

major role in the 

(planned) 

intervention in 

northern Mali 

 

http://www.ngrguardiannews.com/index.php?option=com_content&view=article&id=117753:corruption-as-terrorism&Itemid=730
http://www.ngrguardiannews.com/index.php?option=com_content&view=article&id=117753:corruption-as-terrorism&Itemid=730
http://www.ngrguardiannews.com/index.php?option=com_content&view=article&id=117753:corruption-as-terrorism&Itemid=730


www.cribfb.com/journal/index.php/aesr                       American Economic & Social Review                    Vol. 2, No. 1; 2018 

 

 

29 
 

19 Jan. 2013 Okene, Kogi 

State 

Convoy of Mali-

bound Nigerian 

soldiers 

Ambushing of a 

truck conveying 

Mali-bound 

Nigerian 

soldiers, 

resulting in the 

death of two 

soldiers and 

injuring of five 
others 

JAMBS claimed 

it attacked the 

soldiers because 

of Nigeria‟s 

contribution of 

troops to Mali  

 

17 Feb. 2013 Jamaare (Bauchi 
state) 

Seven 
expatriates 

working with a 

Lebanese 

construction 

company, 

Setraco Nig. Ltd 

Those abducted 
were four 

Lebanese, one 

Briton, a Greek 

citizen and an 

Italian 

JAMBS claimed 
responsibility for 

the kidnapping, 

citing „the 

transgressions 

and atrocities 

done to the 

religion of Allah 

by the European 

countries 

 

Source: Onuoha(2013) 

Table 5: Categories of Militia Groups in the Niger Delta. 

Private Militia Ethnic Militia Pan-Ethnic Militia 

Niger Delta People Volunteer Force 

(NDPVF) 

The MeinbutusArugbo Freedom 

Fighter 

Movement for the Emancipation of 

the Niger Delta (MEND) 

Adaka Marines Iduwini Volunteer Force (IVF) The Coalition for Militant Action in 

the Niger Delta (COMA) 

Martyrs Brigade Egbesu Boys of Africa The Niger Delta People Salvation 

Front 

Niger Delta Volunteers   

Niger Delta Militant Force Squad 

(NDMFS) 

  

Niger Delta Coastal Guerillas 

(NDCGS) 

  

Source:Forest (2012) 

Table 6: Major Incidents of Boko Haram Attacks since 2009 up till date                                                                     . 
Date              Casualties                                                                                          . 

July 26, 2009 Boko Haram launches mass uprising with attack on a police station in 

Bauchi,starting a five-day uprising that spread to Maiduguri and elsewhere. 

September 7, 2010  Boko Haram attacked a prison in Bauchi, killed about five guards and freed 

over700 inmates, including former sect members. 

October 11, 2010  Bombing/gun attack on a police stationin Maiduguri destroys the station 

andinjures three by the group 

December 24, 2010   The group carried out a bomb attack in Jos killing 8 people. 

December 28, 2010  Boko Haram claims responsibility for the Christmas Eve  bombing in Jos that 

killed38 people 

December 31,201  The group attack a Mammy market at Army Mogadishu      Barracks, Abuja, 
11people died 

April 1, 2011    The group attacked a police station in Bauchi 

April 9, 2011  The group attacked a polling center in Maiduguri and bombed it 

April 20, 2011    A bomb in Maiduguri kills a policeman 

April 22, 2011    The group attacked a prison in Yola and freed 14 prisoners 



www.cribfb.com/journal/index.php/aesr                       American Economic & Social Review                    Vol. 2, No. 1; 2018 

 

 

30 
 

April 24, 2011   Four bombs explode in Maiduguri, killing at least three. 

May 29, 2011 Bombings of an army barracks in Bauchicity and Maiduguri and led to death of 

15people 

May 31, 2011 Gunmen assassinate Abba AnasIbnUmarGarbai, brother of the ShehuofBorno, 

in Maiduguri. 

June 1, 2011   The group killed Sheu of Borno‟s brother, Abba El-kanemi 
June 7, 2011 A team of gunmen launch parallel attacks with guns and bombs on a church 

andpolice stations in Maiduguri, killing 5 people. 

June 16, 2011 Bombing of police headquarters in Abuja, claimed by Boko Haram. Casualty 

reportsvary. 

June 26, 2011 Gunmen shoot and bomb a bar in Maiduguri killing about 25 people 

August 16, 2011 The Bombing of United Nations Office in Abuja, killing over 34 people by 

thegroup 

December 25, 2011 Bombing of St. Theresa‟s Catholic Church, Madalla, killing over 46 people 

January 6, 2012 The Sect attacked some southernersinMubi killing about 13 Igbo 

January 21, 2012  Multiple bomb blast rocked Kano city, claiming over 185 people 

January 29, 2012    Bombing of Kano Police Station at Naibawa Area of Yakatabo 

February 8, 2012    Bomb blast rocked Army Headquarters in Kaduna 
February 15, 2012  KotonKarife Prison, Kogi State was attacked by the sect and about 119prisoners 

were released and a warder was killed. 

February 19, 2012 Bomb blast rocked Suleja Niger State near Christ Embassy Church, leaving 5 

people seriously injured 

February 26, 2012 Bombing of Church of Christ in Nigeria, Jos leading to the death of about 

2worshippers & about 38 people sustained serious injuries. 

March 8 2012 An Italian, Franco Lamolinara and a Briton, Christopher McManus, who 

wereExpatriate Staff of StabilimVisioniConstruction Firm were abdicated in 

2011 by a splinter group of Boko Haram and were later killed. 

March 11, 2012  Bombing of St. Finbarr‟s Catholic Church, Rayfield, Jos resulting in the killing 

of 11people and several others wounded. 
April 26 2012 Bombing of three media houses (Thisday Newspaper in Abuja killing 3 &2 

securityofficers&injured 13 people; Thisday, the Sun & the Moments 

newspapers in Kaduna killing 3 persons & injured many others 

April,29,2012 Attack on Bayero University, Kano, killing 13 Christian Worshippers, a senior 

non-academic staff & two Professors 

April 30, 2012  Bomb explosion in Jalingo, claiming 11 persons and several others wounded. 

Sources: Abimbola and Adesote (2012).   

 

Figure 2: Line Graphs of Each of the Series 

0

10

20

30

40

50

60

70

80

70 75 80 85 90 95 00 05 10

INFL

0

400

800

1200

1600

2000

2400

70 75 80 85 90 95 00 05 10

GDPC

0

4

8

12

16

20

24

28

70 75 80 85 90 95 00 05 10

INTR

0

1000000

2000000

3000000

4000000

70 75 80 85 90 95 00 05 10

GOVX

0

40

80

120

160

200

70 75 80 85 90 95 00 05 10

OPEN

0.0

0.2

0.4

0.6

0.8

1.0

70 75 80 85 90 95 00 05 10

POLX

0.0

0.2

0.4

0.6

0.8

1.0

70 75 80 85 90 95 00 05 10

TERR



www.cribfb.com/journal/index.php/aesr                       American Economic & Social Review                    Vol. 2, No. 1; 2018 

 

 

31 
 

 

Figure 3: Kernel Density of TERR 

Table 7: Descriptive Statistics 

 

 

 

 

 

 

 

 

 

Source: Researchers‟ computation, 2013, adapted from regression result using E-view 4.1 

Table 8: Pairwise Correlation Matrix 

 INFL GDPC GOVX OPEN INTR TERR POLX 

INFL  1.00       

GDPC -0.24  1.00      

GOVX -0.22  0.49  1.00     

OPEN  0.03 -0.02  0.43  1.00    

INTR  0.34 -0.09  0.19  0.35  1.00   

TERR  0.20  0.15  0.35  0.36  0.71  1.00  

QINS -0.21  0.47  0.64  0.17  0.29  0.49  1.00 

0.0

0.4

0.8

1.2

1.6

2.0

-0.4 -0.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4

TERR

Kernel Density (Triangular, h =  0.4358)

 INFL GDPC GOVX OPEN INTR TERR POLX 

 Mean  19.48442  540.9800  769439.9  35.64977  11.20209  0.767442  0.441860 

 Median  12.90000  368.5400  66584.00  6.140000  12.24000  1.000000  0.000000 

 Maximum  72.81000  2300.000  3848545.  180.7300  26.00000  1.000000  1.000000 

 Minimum  1.650000  166.6200  5503.000  0.020000  3.500000  0.000000  0.000000 

 Std. Dev.  17.32761  493.6716  1214355.  54.47743  5.312399  0.427463  0.502486 

Skewness  1.507690  2.689627  1.593320  1.474146  0.368211 -1.266108  0.234146 

 Kurtosis  4.333762  9.527664  4.176456  3.832437  2.770214  2.603030  1.054825 

Jarque-Bera  19.47800  128.1880  20.67354  16.81547  1.066253  11.77072  7.172052 

 Probability  0.000059  0.000000  0.000032  0.000223  0.586767  0.002780  0.027708 

 Sum  837.8300  23262.14  33085916  1532.940  481.6900  33.00000  19.00000 

 Sum Sq. 

Dev. 

 12610.33  10235891  6.19E+13  124647.2  1185.307  7.674419  10.60465 

Observations  43  43  43  43  43  43  43 

Augmented Dickey-Fuller 

variables levels 1st 
difference 

2nd 
difference 

Lag 
length 

Order of 
integration 

INFL  -6.330409*  9 I(1) 

GDPC  -3.542123**  9 I(1) 

GOVX  6.061500  9 I(1) 

OPEN  -7.139956*  9 I(1) 



www.cribfb.com/journal/index.php/aesr                       American Economic & Social Review                    Vol. 2, No. 1; 2018 

 

 

32 
 

 

 

Source: Researchers‟ computation, 2013, adapted from regression result using E-view 4. 

Table 9: Unit Root Test 

Source: Authors‟ Computation from Computer Output. 

 Note:  * significant at 1%; ** significant at 5%; and ***significant at 10% 
 

Table 10:  Regression Estimates I 

Variable Coefficient Std. Error t-Statistic Prob.   

C -0.616363 0.598483 -1.029875 0.3099 

LOG(INFL) -0.014902 0.041387 -0.360071 0.7209 

LOG(GDPC) 0.172628 0.073634 2.344397 0.0247 

LOG(INTR) 0.657786 0.101564 6.476560 0.0000 

LOG(GOVX) -0.113963 0.043641 -2.611361 0.0131 

LOG(OPEN) 0.071738 0.034837 2.059220 0.0468 

POLX 0.227890 0.094308 2.416438 0.0209 

R-squared 0.806491     Mean dependent var 0.767442 

Adjusted R-squared 0.774240     S.D. dependent var 0.427463 

S.E. of regression 0.203106 Akaike info criterion -0.202282 

Sum squared resid 1.485067     Schwarz criterion 0.084425 

Log likelihood 11.34906     F-statistic 25.00635 

Durbin-Watson stat 1.445299 Prob(F-statistic) 0.000000 

Source: Computational results using Eviews 4.1 

Table 11: Regression Estimates II 

Variable Coefficient Std. Error t-Statistic Prob.   

C 6.333720 4.832757 1.310581 0.1988 

LOG(INFL) -0.004015 0.026225 -0.153081 0.8792 

LOG(GDPC) 0.045682 0.061769 0.739568 0.4646 

LOG(INTR) 0.008179 0.094853 0.086224 0.9318 

LOG(GOVX) -0.303033 0.148141 -2.045578 0.0486 

LOG(OPEN) 0.012170 0.028209 0.431424 0.6689 

POLX 0.275613 0.072915 3.779929 0.0006 

AR(1) 0.976248 0.028413 34.35878 0.0000 

R-squared 0.911515     Mean dependent var 0.785714 

Adjusted R-squared 0.893298     S.D. dependent var 0.415300 

S.E. of regression 0.135659 Akaike info criterion -0.987703 

Sum squared resid 0.625714     Schwarz criterion -0.656718 

Log likelihood 28.74175     F-statistic 50.03528 

Durbin-Watson stat 2.188453 Prob(F-statistic) 0.000000 

Inverted AR Roots        .98 

Source: Researchers‟ computation, 2013, adapted from regression result using E-view 4.1 

 

 

 

Copyrights 

Copyright for this article is retained by the author(s), with first publication rights granted to the journal. 

This is an open-access article distributed under the terms and conditions of the Creative Commons Attribution 

license (http://creativecommons.org/licenses/by/4.0/) 

INTR  -10.31167*  9 I(1) 

TERR  -6.403124*  9 I(1) 

POLX  -7.695598*  9 I(1) 


