The Economy of Instability: How Trafficking Networks Fuel Conflict in the Sahel

Analysis of Illicit Flows and Their Impact on Regional Governance

General Overview

Across the Sahel, illicit economies have evolved from opportunistic exchanges into genuine financial systems under armed governance. According to the GI-TOC 2025 report, revenues from trafficking now finance insurgent, extremist and militia networks in Mali, Niger, Burkina Faso and beyond. What was once a marginal activity—such as gold smuggling, cattle rustling or arms transit—has become the structural foundation of war economies. These networks infiltrate logistics, taxation and social legitimacy, creating hybrid systems linking armed groups, local elites and segments of the state. The report analyses the financial structure of instability in the Sahel, showing that criminal entrepreneurship has replaced ideological coherence as the main driver of violence.

Context and Regional Dynamics

The Sahel sits at the crossroads of multiple economic and security borders. Its geography—vast, sparsely populated and porous—makes state control uneven. Traditional trade and migration routes have been taken over by criminalised intermediaries, turning corridors such as Gao–Timbuktu–Agadez and Dori–Fada N’Gourma–Kantchari into genuine arteries of illicit finance. The collapse of cross-border trade due to insecurity, combined with the withdrawal of the state from rural areas, has left entire populations dependent on protection economies. Non-state armed groups now act as tax collectors, security guarantors and commodity brokers, often wielding more predictable authority than central governments. The GI-TOC Monitor lists more than 150 Sahelian hubs where trafficking is directly linked to organised violence, 37 of which have become semi-permanent "armed economic capitals".

Key Findings and Trends

1. Mechanisms of Insurgency Financing

Gold smuggling and natural resource exploitation are the main sources of income for armed groups. In Mali and Burkina Faso, artisanal sites such as Boungou and Nampala generate millions in unregulated gold, sold via buyers based in Togo, Ghana and Dubai. Cattle theft and agricultural banditry have become monetised sectors, with stolen cattle laundered through informal cross-border markets between Mali, Niger and Nigeria, where groups impose "pastoral taxes". Kidnappings for ransom provide quick liquidity, with average payments ranging from 5,000 to 20,000 USD per victim in central Mali and over 200,000 USD in Nigeria for engineers or foreign officials. The arms trade and fuel smuggling ensure operational continuity: surplus weapons from Libya, Sudan and Chad pass through Agadez and Sebha, while fuel convoys support the mobility of JNIM and IS-Sahel groups.

2. Fusion Between Trafficking and Local Governance

The integration of trafficking into local governance institutionalises corruption. Governors, military officers and community intermediaries often participate in revenue-sharing systems, turning the insurgency into a semi-regulated economy. As official taxation collapses, warlords and commanders levy "zakat" on trade routes and mining concessions. This fiscal mimicry grants them both financial resources and symbolic legitimacy, especially in areas where state presence is poorly regarded.

3. Financial Corridors and Territoriality

Three major axes structure the financial geography:

• The western axis (Mali–Mauritania–Senegal): dominated by gold and fuel smuggling.
• The central axis (Burkina Faso–Niger): at the heart of cattle, arms and ransom economies.
• The eastern axis (Lake Chad–Sudan): linked to the financing of Boko Haram/ISWAP through taxation of fish, fuel and millet trade.

Each corridor features hybrid governance where smugglers, insurgents and state agents collaborate based on transactional rather than ideological logic.

Strategic Consequences

1. Criminalised Stability

The persistence of trafficking generates a paradoxical stability: in many regions, violence subsides not due to peace agreements, but because rival factions reach a commercial balance. This situation complicates peacebuilding efforts: dismantling illicit economies risks destabilising livelihoods without offering viable alternatives.

2. Exhaustion of Regional Security

Current responses—the G5 Sahel joint forces, ECOWAS structures—remain underfunded and fragmented. The refocusing of Mali, Burkina Faso and Niger on the Alliance of Sahel States (AES) complicates coordination, especially concerning cross-border pursuit rights and the exchange of financial intelligence.

3. International Repercussions

Illicit flows from the Sahel feed global markets for gold, narcotics and small arms. The erosion of regulatory controls exposes supply chains to reputational risks and sanctions. For Western governments and investors, exposure to due diligence in the Sahel now represents a major compliance challenge.

African Security Analysis (ASA) Recommendations

The Sahel has shifted from insurgency to symbiosis between state and criminality. The sustainability of the conflict is more financial than military. Thus, the only viable counterinsurgency strategy is to disrupt trafficking circuits.

Recommendations

• Integrated economic intelligence: create regional centres merging military, customs and financial crime units for real-time monitoring of goods flows.
• Cross-border fiscal corridors: trial "legalised commercial corridors" where verified cooperatives transport goods under supervised taxation, thus breaking the armed groups’ monopoly.
• Transparency of the gold supply chain: implement traceability mechanisms (blockchain, barcodes) for artisanal gold exports, in collaboration with refiners in the UAE and Ghana.
• Substitution of community income: replace informal "zakat" systems with local development grants, conditional on transparency and community oversight.
• Predictive mapping: extend the ASA analytical suite to anticipate market developments, such as the emergence of new routes after crackdowns.
• ASA Engagement: ASA proposes to support regional governments, donors and private actors through:
• Strategic advice on compliance and due diligence in the mining sector
• Training modules for financial intelligence units on detecting illicit flows
• Geospatial monitoring of commercial corridors linking conflicts and supply chains
• Policy dialogues integrating economic disruption into stabilisation missions

The conclusions of the GI-TOC 2025 are unequivocal: defeating extremism in the Sahel requires disarming its markets, not just its fighters.