Insurgency and Economic Growth in Nigeria

Abstract

This study investigates the impact of insurgency on economic growth in Nigeria within the context of the country’s persistent insecurity challenges. Using time series data from 1999 to 2024 sourced from the Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS), Global Terrorism Database, and Index Mundi, the study employed descriptive statistics, Augmented Dickey-Fuller (ADF) unit root test, Johansen co-integration, and Vector Error Correction Model (VECM) to examine the short-run and long-run dynamics between insurgency, discomfort index, terrorism risk index, and real gross domestic product (RGDP). The findings reveal that insurgency exerts a positive but temporary effect on economic growth in the short-run, possibly due to increased emergency-related expenditures, but significantly undermines growth in the long-run. Similarly, the discomfort index exhibited a short-run positive effect but a long-run negative and significant influence on RGDP, reflecting the adverse role of socioeconomic stressors on growth. The terrorism risk index also demonstrated a statistically significant negative effect on economic growth both in the short-run and long-run, with a 1% change in TRI reducing RGDP by approximately 0.66%. These results confirm that insurgency and terrorism pose substantial constraints on Nigeria’s long-term economic development by discouraging investments, displacing populations, and weakening productive capacity. The study concludes that effective counter-insurgency measures, socioeconomic reforms to reduce unemployment and poverty, and community-based peace-building initiatives are critical to mitigating the adverse effects of insecurity on Nigeria’s economic growth.