Macroeconomic consequences of terrorism in Nigeria

Reflecting the global situation, terrorist activities have in recent times been on the upswing in Nigeria with attendant effects on lives, properties, and the smooth functioning of the economy. Because terrorism creates fear, it impacts on the business climate, domestic and foreign investments and by consequence general economic activities. However, the specific impact of terrorism in any local context is conditioned by several factors such as the type of terrorism that it is and the nature of the state's response to incidence of terrorism. Hence, this paper examined the impact of terrorism on selected indicators of macroeconomic performance in Nigeria. The paper argued that terrorism has had significant impact on production activities and economic growth but little impact on foreign direct investment. It also submits that terrorism has led to increased government spending on internal security with crowding out effects on social and development spending. Appropriate recommendations were offered.