Boko Haram, a militant Islamic group in Nigeria has continued to be a threat to the peace and security in the country. The group is not only causing havoc in the country but also the neighboring countries. This terror group has so far caused havoc that is better imagined than felt. There has been a heated debate all over on the political, social and economic consequences of this militant group. Of course there are critical implications of terrorist activities on economic, social and political development in Nigeria. Apart from the widespread loss of property and life being witnessed in the northern part of Nigeria, the activities of Boko Haram have severe economic consequences on the Nigerian economy. Here is an analysis of the effects of the Boko Haram on the Nigerian economy: Drastic plummeting of foreign direct investment A politically stable country is more likely to attract more foreign direct investment than terror-prone country. The Boko Haram have caused a lot of tension in the country since 2010 and this has resulted in foreign direct investment reducing drastically. Based on reports released by the World Investment Report in the year 2013, it is clear that the foreign direct investment flows into Nigeria dropped by almost 21% in just one year. From an economics perspective, any country that experiences such an acute drop in FDI in such a short period is prone to an unimaginable economic strain. The trade sector is the most hit by these dynamics. Besides, domestic capital becomes has become less efficient because it’s not sufficiently supplemented by foreign direct investment. Remember that the Nigerian oil sector and the country’s GDP depend heavily on the inflow of FDI. Therefore the political instability continues to cripple the oil sector as well as the country’s GDP. The Nigerian government is using a lot of material resources to control violent crimes and curb terrorism, an initiative which is really expensive. In just one year, the Nigerian government spends a lot of money on defence and security. These resources could be used in other sectors to better the economy. The cost of curbing the activities of this terror group brings in poverty, political destabilization, and eating up the nation’s vast capital. The state of insecurity created by the Boko Haram is slowly killing key industries in the country. The transport and tourism sector are the worst hit. The country stands to lose a lot because these industries are the key foreign exchange earners, a source of employment to entrepreneurs and major tax revenue generators. Boko Haram has led to mass emigration of citizens who are non-indigenous to the northern region of Nigeria. This has a negative impact on the profitability of business in the region. It can be noted that a number of banks are closing down due to a decrease of economic activities in the area. The mass withdrawal of people from the north implies that economic affairs in the area are completely stagnated. Locally, Boko Haram has caused a decline of the “Okada” business in Yobe and Borno states. This has even prompted the government to ban the business in some parts of these states. Business between various states has also been crippled. Residents of southern states are afraid to visit the northern area and vice versa. Boko Haram has tainted the image of Nigerians to a point that on an international level, Nigerians are treated with suspicion. Even foreigners do not want to visit Nigerian at all costs. It’s disheartening to find that Nigeria , a colorful country which was once believed to be the “Giant of Africa” is being brought down by a selfish and inconsiderate terror group. .