Impact of Terrorism on Nigeria Economic Development

ABSTRACT

This study assesses empirically effects of terrorism on the various sectors of the Nigeria economy with the real sector in view. In spite of government counter-terrorism expenditure and efforts, the incidence of terrorism in Nigeria appears to be rising. This paper examines the growth and fiscal consequences of terrorism in Nigeria by estimating the terrorism--macroeconomic relation using different measures of terror incidence. The results show that terrorism has an economically and statistically significant negative impact on growth; although this impact is considerably small and short-lived, manifesting only after a lag of about three years. Specifically, the cost of terrorism to Nigeria, in terms of lost GDP per annum, is estimated at 0.82 percent.  Moreover, there is evidence that terrorism leads to the reallocation of economic activity away from private investment spending to government spending; that is, terrorism crowds out investment at a higher rate than its potential to crowd in government spending. Lastly, terrorism alters the composition of government expenditure---with the defence component of government expenditure rising vis-a-vis other expenditure items. The results are robust to allowing for dynamic interactions between terrorism and macroeconomic aggregates. 

TABLE OF CONTENTS

TITLE……………………………………………………………………………..ii

DECLARATION…………………………………………………………………iii

CERTIFICATION………………………………………………………………..iv

DEDICATION…………………………………………………………………….v

ACKNOWLEDGEMENT………………………………………………………..vi

TABLE OF CONTENTS………………………………………………………...vii

ASTRACTS……………………………………………………………………..viii

CHAPTER ONE………………………………………………………………….1

1.1 BACKGROUND OF THE STUDY…………………………………………...1

1.2 STATEMENT OF THE PROBLEM…………………………………………..5

1.3 OBJECTIVES OF THE STUDY………………………………………………6

1.4 STATEMENT OF RESEARCH QUESTION…………………………………7

1.5 JUSTIFICATION FOR THE STUDY…………………………………………7

1.6 SCOPE OF THE STUDY……………………………………………………...7

CHAPTER TWO………………………………………………………………….8

2.1 CONCEPTUAL AND THEORETICAL REVIEW……………………………8

     2.1.1WHO IS BOKO HARAM?........................................................................11

     2.1.2OVERVIEW OF THE REAL SECTOR…………………………………12

2.2 EMPIRICAL REVIEW………………………………………………………14

     2.2.1 ECONOMIC CONSEQUENCES OF TERRORISM IN NIGERIA……14

     2.2.2 EXAMINING THE SPECTRAL BITE OF TERRORISM ON NIGERIA’S INDUSTRIAL DEVELOPMENT...........…………………………..17

2.3 IMPLICATION OF THE REVIEW OF THE CURRENT STUDY…………21

CHAPTER THREE……………………………………………………………22

3.1 THEORETICAL FRAMEWORK…………………………………………..22

3.2 METHODOLOGY…………………………………………………………..24

3.2.1 MODEL SPECIFICATION……………………………………………….24

3.2.2 ESTIMATION TECHNIQUE……………………………………………..26

3.2.3 SOURCES OF DATA AND MEASUREMENT OF DATA……………..27

CHAPTER FOUR……………………………………………………………….28

4.1 PRESENTATION OF RESULTS……………………………………………28

4.1.1 DESCRIPTIVE STATISTICS……………………………………....28

4.1.2 UNIT ROOT TEST……………………………………………..…..30

4.1.3 ARDL MODEL 1……………………………………………………31

4.1.4 ARDL MODEL 2…………………………………………………….32

4.1.5 CO-INTEGRATION FORM OF THE ARDL, MODEL 1…………..33

4.1.6 CO-INTEGRATION FORM OF THE ARDL, MODEL 2..………....34

4.1.7 ARDL BOUNDS TEST, MODEL 1………………………………....34

4.1.8 ARDL BOUNDS TEST, MODEL 2……………………………….35

4.2 DISCUSSION OF RESULTS……………………………………………...….35

4.3 COMPARISION OF RESULTS WITH PREVIOUS FINDINGS…………....37

CHAPTER FIVE…………………………………………………………….39

5.1 SUMMARY OF FINDINGS……………………………………………...39

5.2 CONCLUSION…………………………………………………………....39

5.3 RECOMMENDATIONS……………………………………………….…40

REFENCES……………………………………………………………………42

APPENDICES…………………………………………………………………44