How Terrorism Pays In Nigeria
Investigative / Systems-Focused
Beyond the Battlefield
FOR more than a decade, Nigeria has waged war against terrorism with soldiers, jets, and armoured vehicles. Forests have been bombed, camps overrun, and territories reclaimed. Yet, despite tactical victories, terrorism persists—mutating, spreading, and reappearing in new forms. Beneath the violence lies a quieter but more enduring force: money.
Terrorism in Nigeria is sustained not only by ideology or grievance but by a vast, adaptive financial system that cuts across communities, borders, formal institutions, and criminal markets. Security experts increasingly argue that Nigeria’s counter-terrorism strategy has focused too heavily on gunmen while leaving the financial arteries of violence largely intact.
From Ideology to Enterprise
In its early years, Boko Haram relied significantly on ideological sponsors and foreign donations, some routed through charities and informal remittance channels. As international scrutiny intensified, these funding streams narrowed. The group adapted. By 2014, when it controlled swathes of territory in the North-East, Boko Haram had transformed into a largely self-financing organisation.
It imposed taxes on local populations, looted banks, seized agricultural produce, extorted traders, and smuggled goods across borders. When territorial control was lost, the financial model did not collapse—it fragmented, merged, and spread into new violent networks, including bandit groups and criminal-terror hybrids.
Dr. Kabir Adamu, Managing Director of Beacon Consulting, describes today’s terror-finance system as decentralised and highly resilient. According to him, overlapping networks now link terrorism, banditry, organised crime, and local political economies, allowing funds to move faster than Nigeria’s intelligence systems can track.
Kidnapping as an Industry
Kidnap-for-ransom has become the most visible component of this underground economy. Across Zamfara, Katsina, Kaduna, Niger, and parts of the North-Central, communities live under informal taxation regimes enforced by armed groups.
Security assessments estimate that ransom payments linked to terror and bandit networks amount to hundreds of billions of naira annually. Families sell land, livestock, and businesses. Entire communities negotiate collectively to raise funds for abducted relatives.
Contrary to perceptions of chaos, ransom operations are often structured enterprises. A former Department of State Services operative explains that these groups operate with negotiators, couriers, accountants, logistics coordinators, and armed enforcers. By the time authorities track a courier, the funds have already passed through multiple layers.
Illegal Mining: Terrorism’s Silent Financier
Beyond kidnapping lies an even less visible source of funding: illegal mining. Vast ungoverned spaces in northern Nigeria host illicit gold, lithium, and mineral extraction sites controlled or taxed by armed groups.
A mining governance expert describes illegal mining as terrorism’s most efficient financier. Unlike cash ransoms, minerals leave little immediate footprint. Gold exits Nigeria as dust and re-enters global markets as refined bullion, with proceeds returning as “clean” money through intermediaries.
Security reports suggest revenues from illegal mining may rival or even exceed ransom payments, further entrenching terror groups within local economies.
Inside the Financial System
Despite assumptions, terror financing does not operate entirely outside formal banking. Financial intelligence officials acknowledge that significant volumes of illicit funds pass through licensed institutions in fragmented amounts designed to evade detection thresholds.
Agent banking, POS networks, informal bureaux de change, and cash couriers remain major vulnerabilities. While mobile money has expanded financial inclusion, it has also created new abuse channels in rural areas with weak identity verification. Cryptocurrency, though not yet dominant, is increasingly monitored due to its anonymity and cross-border mobility.
The Question of Elite Complicity
Perhaps the most politically sensitive issue remains the identity of terror financiers. Allegations over the years have implicated businessmen, politicians, religious figures, diaspora networks, and criminal entrepreneurs. Few cases have resulted in sustained convictions.
Political analyst Professor Jideofor Adibe argues that terror financing is not a poor man’s crime. “It requires capital, access, and protection,” he says, warning that without confronting elite enablers, the system will continue to recycle itself.
Cutting the Financial Lifeline
Government officials insist progress is being made. Defence Minister General Christopher Musa (rtd.) and Chief of Defence Staff Lt. Gen. Olufemi Oluyede have both emphasised intelligence-led financial disruption alongside military action.
While authorities cite prosecutions and enhanced AML frameworks, critics question the scale of asset seizures and the transparency of recovered proceeds. Experts argue that meaningful disruption requires political courage, deeper financial intelligence, stronger border controls, and community-based economic alternatives.
As long as terrorism remains profitable, violence will regenerate. Nigeria’s war will not be won in forests alone—it will be won in bank records, mining pits, border towns, and digital ledgers.
