The Impact of Terrorism on Economic Governance in Africa: Case of Boko Haram in Nigeria

Abstract

This research examines the impact of terrorism on economic governance. Many studies have been conducted on the implication of poor governance on terrorism. However, little effort has been made to study how terrorism contributes to poor governance. This study interrogates how activities of Boko Haram have led to poor governance in north-eastern Nigeria. The study informs the government in north-eastern Nigeria on how terrorism undermines governance. This study asserts that terrorism affects economic governance in the management and accountability of public finance. Secondly, the integrity of monetary and fiscal systems is undermined. Lastly, government control on the economic regulatory framework is affected. Based on the gap that this study area has not been critically studied, this study uses systems theory to interrogate how terrorism in Africa with emphasis on those key areas of economic governance earlier mentioned, are affected by Boko Haram activities in Nigeria. The philosophical paradigm of this study is based on the relativist ontological belief. Furthermore, the pragmatic interpretative framework of this belief focuses on the act of terror, its impact and consequences on economic governance. The epistemological belief of this study is based on interpretivist and constructivist views. while the methodological paradigm was guided by phenomenological research. This approach means that the study relied on more qualitative and less quantitative methods of inquiry, data collection and analysis. The study area was purposefully selected based on terror hotspots in the 6 States within north-eastern Nigeria. A mixed research method was used for this study. This study's purposeful qualitative sample size is 47 interviewees from a targeted population comprising of financial entities and authorities in the government, civil society and academia, and the private sector. This selection is on the basis that this research is strongly grounded in phenomenological and case study research. To support the interviewee-qualitative data, qualitative and quantitative data was obtained from database documents and reports from the Global Terrorism Index, World Bank’s World Governance Indicators, and financial institutions within north-east Nigeria. Content analysis was adopted for the qualitative data, while regression analysis was used for the quantitative data. Both qualitative and quantitative analyses were carried out to test the hypothesis. The study reveals that terrorism, particularly property destruction, negatively affects economic governance in Africa. In the northeast region of Nigeria, the number of terror related injuries negatively affect public financial management. Also, the number of Money deposit banks (MDBs) and micro-finance institutions (MFIs) have reduced due to a significant increase in property destruction and xxvii deaths in the region. Similarly, the hypothesis testing reveals that terrorism significantly affects economic regulations in the region. This study affirms all the hypotheses on the negative effects of terrorism on economic governance. It argues that governments in Africa need to focus not just on security but also on the economic sector in terror-affected regions. The citizens must be facilitated and encouraged to actively participate in the budgeting processes, particularly at the legislative level. In addition, State and non-State actors need to address the supervisory gaps in the MDBs and MFIs and enact favourable policies for the capital and monopoly markets to facilitate production in the north-eastern region.