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Very complex term, long etymological story: from the French "Panique au Zaire", referring to popular urban revolutions in colonial Congo, when cities were being looted and white colonists chased out of their villa's. Black urban youngsters in Congo picked up all kinds of headlines from the newspapers and radio-bulletins, and turned them into insults, slang and creative poetry.
(It's in these colonial contexts, like in South Africa and Zaire in the 1950s, that rap developed).

When the Belgian colonizers were becoming more repressive and the Congolese came to [understand] just how heavily they were being exploited, they often created little urban uprisings, to scare off [the White Man]. They also used code language to fool the cops.
These "gangsters" used to run through [the streets], ironically shouting "PANIKOZAIRE! PANIKOZAIRE" at the white cops and the white wives who hid behind the walls of their chique villas.

Nowadays, tough people ([in the French] bidonvilles and ghettos) still use it in an ironic way, to scare others off.

Instead of scaring whitey with something like "I'm going to murder you right here right now", just shout PANIKOZAIRE, smile and grab his wallet.

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