Islamic ethical formation plays an important role in shaping young people’s understanding of responsibility, lawful earning, solidarity, dignity, and community membership. In Northern Nigeria, however, these ethical commitments are negotiated within social environments characterised by uneven educational opportunities, economic insecurity, changing religious authority, and different forms of social exclusion. Existing discussions frequently examine Islamic moral education, youth unemployment, and violent extremism as separate issues, leaving insufficient attention to how young people themselves interpret religious teachings amid everyday economic and social pressures. This study examines the relationship between Islamic ethical formation, economic exclusion, and community belonging through a qualitative documentary and interpretive analysis of relevant scholarship, including ethnographic research on Qur’anic education in Northern Nigeria, studies of Islamic moral values among Nigerian youth, and recent research on religious education and violent conflict. The analysis identifies four interconnected themes: religious socialisation as a source of moral agency; economic exclusion as a challenge to dignity and responsible participation; community belonging as a potential source of support and recognition; and the importance of institutional credibility in shaping young people’s interpretations of religious teachings. The analysis suggests that Islamic ethical formation should not be understood as a simple protective or risk-producing factor. Its influence depends on how religious teachings are interpreted, how institutions practise the values they teach, and whether young people have meaningful opportunities to participate in social and economic life. The study contributes a proposed Ethical Formation–Inclusion–Belonging Framework for examining these relationships. It recommends participatory research involving young people, religious educators, families, and community organisations to test the framework empirically. The study does not claim that poverty or unemployment automatically leads to radicalisation; instead, it emphasises young people’s agency, the diversity of religious experiences, and the interaction between ethical commitments and structural conditions.