Confronting terrorism has become one of the most important fundamentals of national governments’ foreign policies. The fight against the scourge has increasingly and generally gained legitimacy and justification among the international community particularly as many nation-states consider it to be their international obligation to support the global movement to ameliorate if not to eliminate the menace. The paper sets out to examine the causes of terrorism and its effects on Nigeria’s foreign policy. It argues that the escalating rate of terrorist acts demonstrated in varying dimensions is not unconnected with frustration caused by high rate of unemployment particularly among the youth. The paper also emphasises that terrorist acts are employed by political elites to fight their political opponents and also to gain relevance and popularity in the political market