Reference no: EM131069648

Economist claim that terrorist attacks can be viewed as another type of trade barrier. Do you agree? Why?

After reading The African Business Journal article about Boko Haram in, ''Boko Haram and its impact on Nigerian Economy'' Do you think this terrorist organization and it's action in Nigeria is having an impact on Nigeria's import/export industry (trade)?

If so, what type of affect do you think the terror group has on Nigeria's import/export business?

This first one of my classmate:

I think it's interesting how the article begins by implying that the terrorist group Boko Haram has actually made an economic impact on Nigeria's economy; but the author waited until the very end of the article to state that "the resource rich southern region has been spared from violence to this point" further explaining that "this could be one of the factors as to why Nigeria's stock market has been seemingly unaffected by all the recent turmoil". Since the beginning of violence in the Northern regions of Nigeria, the Nigerian economy has been business as usual.

The fact that the impact of Boko Haram in Nigeria hasn't affected foreign and domestic government interest, such as the agriculture sectors and the oil industries, I don't see why it shouldn't remain business as usual. It's usual for a corrupt government similar to Nigeria's government to trade humanistic value for economic values. In 2013, $21 billion poured into the economy even after the widespread violence; simply because Boko Haram haven't reached the southern parts of the country where most foreign interest are located.

It would to prudent for the Nigerian government to eradicate the Boko Haram terrorist group in order to protect foreign interest and to encourage more or a stable foreign direct investment. I'm sure the Nigerian government would very much like to avoid another 21% ($8.9 billion in 2011 to $7 billion in 2012) drop in foreign direct investment. The impact of Boko Haram terrorist group, according to this article has been over glamorized as being a destructive force.

This is the second one of my classmate response:

Yes, I do believe terrorist attacks can be viewed as another type of a trade barrier. Instilling fear in the area affected as well in foreign investors tend to create a panic that tells people to evacuate. Once panic sets in, it is very difficult to remove.

In the large scheme of things, Boko Haram has slightly impacted Nigeria's overall trade. This is because Boko Haram is localized in northern Nigeria not south Nigeria where the resources are rich such as oil. The economic impact that was noticed was in the form of foreign direct investments (FDI). FDI quickly dropped when Boko Haram came to form and the government having little power over them. Outside investors or countries looking to trade would take note on the volital environment that parts of Nigeria are in and shy away. No one wants to invest in an area that may be dangerous in more ways than one. New business will not form in northern Nigeria due to this very reason. Its very own people are fleeing to other parts of the country, however, the article notes that in the areas of destruction are the areas of opportunity.

I also believe that Jonothan's government must act swiftly and demolish Boko Haram in order to save the country from further destruction. They cannot ignore what is going on in order to send all resources to the south. Unfortunately, this is more common than not, however, if it continues to be ignored, the destruction will soon spread to all parts of Nigeria including the resource rich south.