Ever since the attack on twin tower of 9/11 the dimension of a terrorist attack on either a soft target or strategic place across the globe has become a serious concern to state securities and sustainability in the global peace (Gaibulloev & Sandler, 2019). Since then, variety of definitions on terrorism becomes available in defence economics literature, but the most frequently used definition is a combination of some attribute as indicated by Enders W, (2006) describing that, use of extreme violence to subdue someone, as well as the nature of terrorist attack on individual. Terrorism attack is known to be an intentional act of violence by individual perpetrator’s versus opponents in order to promote personal, social, economic and political gains by exerting extreme force to cause damage involving act of bullying, violence to achieve ideological believes, political or social manifest (Llussá, F., Tavares, 2007). This, in turn leads to government commitment to engage them, which may possibly result to increase in government expenditure on military and other security formations. Many researchers have debated over the economic impacts of terrorism on economic performance Bagchi & Paul, (2018); M. Ogundipe, Ojeaga, & A. Ogundipe, (2014) but for the particular issue on unemployment and terrorism nexus where mostly ignored by many researchers with only a few studies particularly in this regards, in which the present study tries to fill the gap in the field of defence economics as the case of Nigeria. Nigeria is faced with the most horrible terrorist activities in the world, as pursue by Boko Haram terrorist group, banditry and Niger delta militancy. Despite consideration of many aspects of terrorism in defence economics, the disastrous effect of terrorism in Nigeria has not been seen in terms of unemployment and economic growth.
1.1. Nigerian economy and terrorism activities
In Nigeria terrorist activity is a plausible course of action engaged by the poor majority to equalised what they have strongly believes on and for material resource acquisition. In fact many people of poor class will trade-off their own lives to generate financial resources to feed on their families for those at extreme level of poverty. Study indicates that over 86.9 million Nigerians are currently living below poverty level (Kharas et al., 2018). Meanwhile, in Nigeria more than 70% population are engage in agricultural practices becoming a major employment source and accounted to 20% growth domestic product (GDP) rate. Majority of the populace lives in villages where agriculture predominate occupational practice. This represents about 52% of an estimated population of 200 plus million Nigerians without jobs. The existing evident in job losses in Nigeria has resulted to a scenario of categorising the country as among the poverty capital of the world in 2018 study conducted by (Kharas et al. 2018).
The farming practices that usually help to cushion the effects of rural poverty and unemployment in the past has been negatively affected by the Boko Haram insurgency and escalating farmers-herdsmen conflicts across Nigeria (Institute for Peace and Conflict Resolution 2017). Research has shown that terrorist organizations take advantage of economic deprivation to recruit from the deprived and jobless (Krueger, A.B., Maleckova, 2003; Richardson, 2011). This provided fertile ground for terrorist organisation i.e Boko Haram, which recruited members from among the jobless youth and earned local support by taking advantage of grievances based on social inequalities, injustice, and marginalization (Atangana, 2018).
Furthermore, the situation has gone from bad to worse, as available statistics shows that unemployment rate has continued to increase since the first quarter of 2015, jumping from an average of 6.4 in 2015 to 14.2 in 2017 (National Bureau of Statistics, 2017). And indeed, those who live in vulnerable local communities are out of developmental progression to receive meaningful livelihood empowerment support that will make them less vulnerable to terrorist recruitment (Ekeanyanwu, 2018 and Shettima, 2017), so they become susceptible to all forms of religious ideologies.
In the above Fig. 1 we can have a vivid picture on how the 3 variables relate to one another, defining a trend and a co-movement among the variables, the graph shows a consistent increase in terrorism index with a relative increase in the level of unemployment, while the economic growth bound to have a declining trend along the period, revealing a situation of a reduced economic performance especially between 2010–2020. The circumstances may have been as a result of economic policies uncertainty, deteriorating law & order and governance, deficit in balance of payments, high levels of non-productive military spending, rising external and internal debts and, high debt services on external debt can inversely affected economic growth(citation). As the case may be, the Nigerian economy suffers a lot from high unemployment rate leading to backwardness of agricultural production especially in recent years (Oguntunde, Ojo, Okagbue, & Oguntunde, 2018). Furthermore, in some instances the demand for unskilled labour in industrial as well as agro-related sectors has decreased due to the adoption of advanced technology which reduced job opportunities for unskilled labour (Shahbaz, 2013) in which Nigeria has large number of uneducated youth mostly in villages. This situation may possibly result to an increased income inequality effect and poverty across the country. We have witness a rise in government expenditures on security since 2001 at the expense of development expenditures due to hike in terrorism, but yet the effort was subdued by many unpatriotic civilian in terms of corruption, where a large sum is being diverted to their personal gains. In addition, more than half of the manufacturing sector had collapse since 1980’s with little contribution to GDP growth which led to poor contribution in absorbing the increasing rate of labour force. In fact, many challenges has resulted to the failure of these industries i.e. lack of stable energy source like electricity which have created a large vacuum affecting the establishment of industries, that will go a long way to reduce the unemployment rate and increase the domestic production (Fotis, Karkalakos, & Asteriou, 2017). The effect of these has seriously negates to an increase in unemployment level with little attempt to overcome it. A country with such an environment will definitely paused a failure for local investment and international financial crisis due to insufficient foreign direct investment (Erdogan & Unver, 2015). Considering the population growth rate in the country as the highest in Africa with the largest majority living below the poverty level, spending less than a dollar a day with poor consumption income will cause to have a serious effect on their consumption behaviour through an increased demand, causing them to accept invitation to terrorist act for material gain. As further indicated by the study of Krueger, A.B., Maleckova, (2003) terrorism demand theory which defines that unemployed individuals are more preferable to the terrorist organizations due to their poor income level easily convince to engage themselves to the terrorist activities. Pick, W. M., Ross, M. H., (2020) pointed out that, informal sector of the economy form part of the major source of unemployment in less develop economies, therefore excess supply of labour or high level of unemployment push people to become street vendor easily adopted to terrorisms activities as the case may be in Nigeria with teeming level of youth. Similarly, rising prices of gas and petroleum oil has a contributing role, resulting to an increase in the cost of production that will further increase economic down turn (Shahbaz, 2013). when most of the industries are busy downsizing as a result of increase in production cost. In another dimension, most of the resources were diverted from developmental pool and are wasted due to security threats, leading to a reduced performance of production in the country with high rate of unemployment (Huynh, 2016).
The study is to investigate the impact of unemployment and economic growth on terrorism in Nigeria. The study will further explore in addition to the existing findings on terrorism literature, becoming a unique effort to fill the gap on defence economics particularly in Nigeria. Secondly, quantile regression techniques has recently regained a renewed acceptance by many scholars as one of the most efficient and functional linear model to measure and evaluate relationships as developed by Koenker and Xiao, (2004), capturing the impact at various level of quantile with multiples coefficient measuring a long and short run impact as against cumulative approach of other techniques. We then, tries to show the level of impact of these terrorist attack when 2 of the estimate became significant in particular group.
The existing study have applied quantile regression to analysed differently the effect of unemployment and economic growth on terrorisms activities in Nigeria base on different percentiles and various coefficient with different scope ranging from 1990 to 2020, specification and methodology, as well as the time frame. The study will further explore the root causes, the magnitude and intensity of the damages can a terrorism pause to Nigerian economy.