Northern Nigeria particularly its Eastern part has not known peace since 2009 because of terrorism as manifested in the activities of Boko Haram the insurgent sect. The Jihadist group started an armed rebellion against the government of Nigeria and has since then not relented. The Boko Haram insurgency has wrecked serious havoc on the lives and properties of the peoples of the North East creating refugees and internally displaced persons (IDPs) in the process with the climax being the abduction of the over 200 Chibok School girls in April, 2014. This paper adopts a qualitative research method with reliance on both primary and secondary sources of data and assesses the impacts of terrorism on the economy of Mubi Local Government Area. It discovered that the incessant attacks by terrorist groups particularly Boko Haram has led to distortions in the social, political and economic activities in Mubi local government. The paper recommends the involvement of traditional and community leaders in intelligence and information gathering and concludes that a judicious implementation of these recommendations will bring relieve not only to Mubi Local Government Area in Adamawa State but Nigeria at large in the war against terrorism. Key Words: Terrorism, Boko Haram, Insurgency, Economy..