Witnesses said the explosion ripped through the market early Tuesday.
Boko Haram appears to operate largely outside the banking system.
Boko Haram, whose name means ‘Western education is a sin’, has been carrying out deadly attacks in Nigeria.
It is the latest in a series of violent attacks blamed on Islamic extremists.
The group was kidnapped in the last week during a Boko Haram attack on Kummabza village in the Damboa district of Borno state.
One student said people ran out of the School of Hygiene yelling “Get out! It’s a bomb.”
Alhaji Tar, a member of the vigilante group, said the group also took three young men who tried to stop the kidnapping.
Othman Abubakar, a spokesman for the Adamawa state police, confirmed the explosion but he couldn’t say how many people had been killed or injured.
police officials said 24 soldiers and 21 policemen killed in an attack on Monday evening on Buni Yadi town in Yobe state.
These personnel, Obama said, will support the operation of intelligence, surveillance and reconnaissance aircraft for missions over northern Nigeria.
At least 118 people were killed and dozens wounded in the bombings, according to Nigeria’s National Emergency Management Agency.
Some 500 hunters say they have been specially selected by their peers for their spiritual hunting skills.
Western nations will provide technical expertise and training to the new regional African effort against the extreme Islamists.
Boko Haram had kidnapped 276 girls from the remote town of Chibok in Borno state on April 14.
The Boko Haram video showed more than 110 girls sitting on the ground in a rural location, the first time they have been seen in captivity.