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Observatory of Illicit Economies in West Africa
Summary highlights
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Pitfalls in responding to armed groups’ supply chains: lessons from Cameroon and the Sahel.
Armed groups and terrorist organizations rely on illicit financial flows, and both licit and illicit supply chains of goods to finance their operations and acquire the resources they need. Countering these illicit flows of finances and resources is a challenging task. Approaches premised on ‘blocking’ flows have been used to counter both financial and operational resource flows – and the latter method is having significant unintended consequences, particularly through harms to communities. The Ambazonian separatists in Cameroon and their use of international money transfers, and Jama’at Nusrat al Islam wal Muslimin’s acquisitions of key goods for their operations, such as fuel and motorbikes, provide case studies of how such approaches to ‘blocking’ flows have generated contrasting results.
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The challenge of tackling illicit economies with international sanctions regimes: the Kimberley Process in the Central African Republic.
The Central African Republic (CAR) has been under varying levels of restrictions through the Kimberley Process Certification Scheme – the international trade regime that aims to prevent the export and sale of ‘conflict diamonds’ – over the past decade. However, the scrutiny and trade restrictions on diamonds has led to armed groups shifting the focus of their role in the extractives sector to gold. This means that in terms of overall conflict financing there is more of a shift in focus, rather than a reduction in illicit activity. These impacts cannot be said to be contributing to the broader goal of peace and security in the CAR. The CAR case study highlights a discrepancy between expectations and realities seen in international sanctions regimes.
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Benin introduces mini fuel stations as a window opens to tackle illicit fuel supply chains and armed groups.
In May 2023, the 50-year fuel subsidy in Nigeria was lifted, leading to a substantial price increase and considerable knock-on effects on the illicit fuel trade in areas of northern Benin. Some months later, a fire at an informal fuel warehouse in Sèmè-Kraké, at Benin’s border with Nigeria, claimed 35 lives. Together, these developments have spurred political will in Benin and created a significant window of opportunity to disrupt the informal trade. In October 2023, Benin’s government announced a programme to build 5 000 mini fuel stations across the country, aimed at bringing informal fuel traders into the formal sector. If implemented successfully and focused on the north of the country, given the close links between the illicit fuel sector and non-state armed actors, shrinking the informal fuel economy may have a positive impact on instability in the country and the wider region.
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Understanding the motives for kidnapping in north Benin is a crucial initial response to the security crisis.
In October 2023, suspected violent extremists attempted to kidnap three fishermen in the northern Beninese village of Porga, on the border with Burkina Faso; one escaped, the other two were killed trying. As violent extremist organizations (VEOs) have expanded into Benin since 2021, kidnapping incidents have surged. Kidnap for the purposes of forced recruitment is one way in which VEOs have sought to extend their areas of influence, and while kidnap for ransom is sometimes used as a means of financing, kidnapping is often perpetrated for more strategic purposes by armed non-state actors in the country. Tracking overlaying motivations, and ensuring a more nuanced understanding of the kidnapping market, is a central step in shaping responses and protection structures.
About this issue
At the end of 2022, the Global Initiative Against Transnational Organized Crime (GI-TOC)’s Observatory of Illicit Economies in West Africa highlighted the increasing overlap between conflict zones and areas of illicit activity, with conflict actors often playing a significant role in a number of illicit economies. Throughout 2023, conflict and violence continued, with violent extremist organizations (VEOs) – primarily Jama’at Nasr al-Islam wal Muslimin (JNIM) – expanding their activities in some northern parts of coastal West Africa, particularly Benin.
Over the past years, GI-TOC research has underscored the need for nuanced analysis of the intersection between illicit economies and conflict as a prerequisite for effective stabilization measures. This issue of the West Africa Risk Bulletin, therefore, focuses on a range of responses to illicit economies linked to (in)stability taken across the region.
Such responses often focus on the ways in which armed non-state actors are financed by, and draw resources from, illicit economies. Indeed, armed groups and terrorist organizations rely on illicit financial flows, and both licit and illicit commodity supply chains to finance their operations and acquire the resources they need. Although responses based on tracing and preventing financial flows have had some success, when such approaches attempt to block operational resource flows, they have had significant unintended consequences, particularly in the form of increased harm to communities in countries affected by non-state armed violence. The first article in this 10th issue of the West Africa Risk Bulletin therefore examines how such responses focused on blocking illicit financial and operational resource flows have produced contrasting results in the cases of the Ambazonian separatists in Cameroon and JNIM in the Sahel.
National responses are often implemented in the context of other responses at the international level. One such response is the use of international sanctions as a tool to combat many types of illicit activity. The Central African Republic (CAR), for example, has been subject to varying levels of restrictions over the past decade under the Kimberley Process Certification Scheme – the international trade regime designed to prevent the export and sale of ‘conflict diamonds’. The second article in this issue, which explores how sanctions can reshape illicit economy ecosystems – as evidenced by the decline of the CAR’s diamond market and the growth of its gold sector – highlights a discrepancy between expectations and reality that can be a common feature of international sanctions regimes, and questions whether reshaping in the context of the CAR has had any impact on the financing of conflict actors.
How can governments effectively manage the tension at the heart of the issue, namely that informal economies are proving to be instrumental in the strength and expansion of armed groups, but also a crucial means of survival for large sections of the population in West and Central Africa? The third article looks at the informal fuel trade in Benin, a sector that is essential to the financing of VEOs, but also a major source of livelihoods in the country. A series of developments, both in neighbouring states and in the country itself, has created a significant window of opportunity for the government of Benin to harness the potential of the fuel sector in the country, while disrupting its links to regional instability. Could a programme to introduce 5 000 mini fuel stations aimed at bringing informal fuel traders into the formal sector do just that? This article recognizes that timing – as much as the shape of an intervention – can be decisive in determining the impact of stabilization programming.
However, the timing and the substance of an intervention can only be appropriately tailored to the context on the basis of an accurate diagnosis of the illicit economy, its links to (in)stability and its embeddedness in local economies. Staying in northern Benin, the final story examines how kidnapping has risen sharply since 2022 as VEOs, particularly JNIM, have expanded their influence in the coastal state. But while it is commonly assumed that kidnapping is for ransom (in line with the continued focus on the financing of armed groups), this is not the only – or even the primary – motive for JNIM’s escalating use of kidnapping in northern Benin. JNIM uses kidnapping for a range of strategic purposes, including intelligence gathering and, as is the focus of this article, forced recruitment. Tracking and analyzing these different motivations, and the impact on communities, is pivotal in shaping responses.