The recent revelation by the Borno State Commissioner for Information and Internal Security, Professor Usman Tar, that business interests now predominantly drive the Boko Haram crisis in Nigeria’s North-East marks a significant turning point in our understanding of this persistent conflict. Speaking at the 2025 Nigerian Academy of Letters’ Dialogue Series, Professor Tar disclosed that while more than 90 percent of the original Boko Haram members have been eliminated or surrendered to Nigerian military forces, the conflict persists through economic mechanisms that sustain violence and instability.
This transformation from ideological extremism to profit-driven terrorism demands a fundamental recalibration of Nigeria’s counter-terrorism strategy. The imperative now lies in disrupting the financial architecture that serves as the oxygen sustaining these violent enterprises. This shift in approach recognises that military operations alone, while necessary, are insufficient to resolve a conflict increasingly driven by economic motivations rather than purely ideological ones.
The evolution of Boko Haram’s economic model
Boko Haram’s transformation from an ideologically motivated movement to what increasingly resembles an economic enterprise represents a significant evolution in Nigeria’s security landscape. Professor Tar’s observations align with emerging patterns across the Sahel region, where terrorist organisations have adapted their operational models in response to intensified military pressure. This adaptation has not diminished their threat but rather transformed it into something potentially more resilient and adaptive.
The economic dimension of this conflict now transcends traditional narratives of religious extremism. As foreign financial support from international terrorist organisations like al-Qaeda and ISIS has diminished due to global counter-terrorism efforts, Boko Haram has increasingly pivoted toward domestic revenue generation. This shift represents both a vulnerability that can be exploited and a challenge that requires more sophisticated responses beyond conventional military operations.
The scale of this economic enterprise is staggering.
According to the National Bureau of Statistics’ “Crime Experience and Security Perception Survey 2024,” Nigerians paid an estimated N2.3 trillion in ransom to terrorists within a 12-month period, with 65 percent of kidnapping-affected households resorting to ransom payments. The North-West region, where Boko Haram has extended its influence, recorded the highest crime incidents, with approximately 14.4 million reported cases. On average, each affected household paid N2.67 million per incident—a figure that illuminates the enormous financial burden on Nigerian families and the substantial revenue stream flowing to terrorist organisations.
The economic impact on communities and national security
The financial dimensions of terrorism extend beyond direct payments to perpetrators. Communities under Boko Haram’s influence face systematic economic exploitation through various mechanisms. These include forced taxation systems, property confiscation, and punishment regimes for non-compliance that range from physical violence to execution. Such systems create cycles of impoverishment, displacement, and vulnerability that further erode social cohesion and governance structures.
This economic predation generates cascading effects: reduced agricultural production leads to food insecurity, commercial activities contract under extortion pressures, and population displacement creates humanitarian crises that strain national resources. What begins as localised economic exploitation ultimately transforms into a national security crisis with profound implications for Nigeria’s development trajectory and regional stability.
The financial architecture of terrorism in Nigeria
Understanding Boko Haram’s funding mechanisms requires recognising their multifaceted and adaptive nature. Their financial architecture combines traditional criminal enterprises with sophisticated exploitation of both formal and informal economic systems.
Domestic revenue sources have become increasingly important as international funding channels face greater scrutiny. These local funding mechanisms include kidnapping for ransom, targeting school children, wealthy individuals, politicians, and businesspeople; community extortion from local traders and farmers; and engagement in local economic activities, including cattle rustling and trading in contraband goods. In territories under their influence, Boko Haram imposes taxation systems that mimic formal governance structures, creating parallel economic systems that challenge state authority.
The international dimensions of this financial network, while diminished, remain significant. Historical connections to organisations like al-Qaeda and ISIS provided not just funding but also operational knowledge and ideological reinforcement. The Intergovernmental Action Group against Money Laundering in West Africa (GIABA) has documented how terrorist organisations utilise both licit and illicit funding sources, moving resources through under-regulated formal and largely unregulated informal channels to support operations.
What distinguishes terrorist economic systems from conventional criminal enterprises is their enforcement capabilities. Boko Haram employs brutal punishment regimes against community members who fail to meet financial obligations. These include physical violence, property confiscation, forced labour, conscription, and executions. Such enforcement mechanisms create environments of fear that facilitate economic exploitation and undermine government authority.
These punishment systems represent a form of shadow governance that challenges state legitimacy. As communities are forced into these exploitative economic relationships, they may perceive the state as unable to provide security and protection—further eroding trust in formal institutions and creating conditions where terrorist organisations can extend their influence.
Nigeria’s counter-terrorism infrastructure
Nigeria has established a substantial legal and institutional framework to combat terrorism financing. This infrastructure includes the Terrorism (Prevention) Act of 2011 (as amended), the Money Laundering (Prohibition) Act of 2011, Anti-Money Laundering and Counter Financing Terrorism Policy, and Securities and Exchange Commission Regulations. These legislative measures align with international standards and demonstrate Nigeria’s formal commitment to addressing terrorist financing.
The institutional architecture supporting these laws includes specialised agencies like the Nigerian Financial Intelligence Unit (NFIU), the Special Control Unit Against Money Laundering (SCUML), the Central Bank of Nigeria (CBN), and various intelligence and security agencies. Nigeria has also developed a National Counter Terrorism Strategy (NACTEST), first published in 2016, which includes provisions specifically targeting terrorist financing. The country’s 2022 Terrorism Prevention and Prohibition Act formally established the National Counter Terrorism Centre and created the legal framework for a National Sanctions Committee for implementing United Nations Security Council Resolutions on countering terrorism financing.
Implementation challenges and institutional coordination
Despite this robust formal infrastructure, implementation challenges persist. The coordination between various agencies remains suboptimal, and information sharing across institutional boundaries often encounters bureaucratic obstacles. As the Chief of Defence Staff’s call for UN assistance suggests, these domestic capabilities have not yet achieved their full potential in addressing terrorist financing.
The effectiveness of counter-terrorism financing measures depends not just on their existence but also on their consistent and coordinated implementation. Nigeria’s challenge is not primarily legislative or by institutional design but rather operational execution and interagency collaboration. These challenges are not unique to Nigeria—they reflect common difficulties in counter-terrorism financing across developing nations, as documented by the UN Office on Drugs and Crime in similar contexts.
Prof. Isaac Olawale Albert, Professor of Peace and Conflict Studies and the pioneer Dean, Faculty of Multidisciplinary Studies, University of Ibadan. He is a specialist in conflict analysis, peace process planning, implementation, and evaluation. He is a member of the National Standing Committee of Nigeria’s Tertiary Education Funds (TETFUND) on Research and Development (R&D); the Editor in Chief of the African Union’s African Journal on Terrorism; a Fellow of the Nigerian Academy of Letters; Fellow, Institute of Chartered Mediators and Conciliators (ICMC), Fellow of the Society for Peace Studies and Practice (SPSP) and Fellow, West Africa Peacebuilders (Accra, Ghana). He was a federal delegate to the 2014 Nigeria’s National Conference in Abuja, and a member of the Presidential Committee on the Review of Nigeria’s Defence Policy (2014/15).
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