Does Terror Attacks Hinder Growth in Nigeria?  Empirics from ARDL and Granger-Causality Approach

The main purpose of this paper is to investigate the effect of terrorism on growth and government fiscal behavior in Nigeria. The study employed analytical technique of Autoregressive Distributed-Lag (ARDL) and Granger causality using exploratory research design and sample period 1990-2021. Results from ARDL indicated that terrorism impacted negatively on growth. However, government security spending had positive and significant impact, suggesting that as terrorism increases, government spending on defense also increases. The results of Granger causality test showed evidence of uni-directional causal relationship between terrorism and GDP. Study recommends government expenditure program be directed at improving well-being of the masses through creation of employment opportunities.

Keywords:  Terrorism, Insurgency, Government Expenditure, Economic Growth, ARDL

JEL Classification: F51, F52, H12