The vigilante force defending the town fled when it ran out of ammunition. Damboa is one of the biggest towns in Borno state and a significant trading center, the BBC reports.
Fighting around the town has damaged electricity stations, leaving the regional capital of Maiduguri without power for three weeks. The capital is about 53 miles from the captured area.
Since 2009, Boko Haram has led an insurgency with the goal of creating an Islamic state. It drew international attention earlier this year when it kidnapped hundreds of schoolgirls, many of whom are still prisoner.
Nigeria's government has faced heavy criticism for failing to rescue the girls and to end the insurgency.
Nigeria's President Goodluck Jonathan asked the country's National Assembly to borrow $1 billion to fund a military response, but the assembly broke for a two-month recess before approving the request.
Some Nigerian soldiers say they are outgunned by Boko Haram. Critics say that much of Nigeria's $6 billion military budget is lost to corruption. The military has come under criticism for abuses against civilians.
In June Bishop Matthew Kukah of northern Nigeria’s Diocese of Sokoto told CNA that Boko Haram has gained power due to the weakness of the local government and due to the loss of credibility of the local Muslim lawyer class.
He blamed “years of corruption” and “mismanagement of state resources” for consigning citizens to “misery and squalor.”
He said Boko Haram are “purely and simply criminals,” though they have some grievances similar to those of ordinary Nigerians opposed to corruption and poverty.
The Boko Haram uprising has been bloody. At least 2,053 civilians have been killed in an estimated 95 attacks in the first six months of 2014. Previously, about 3,600 civilians had died in the conflict.
The U.S. government only recognized Boko Haram as a terrorist group in 2013, after years of lobbying from Christian groups and other human rights advocates.
Islamic militant group Boko Haram has taken control of the northeastern Nigeria town of Damboa in a July 18 attack that killed at least 40 people.
Violence, Nigeria, Africa, Boko Haram