Explainer: Illicit Economies in West Africa

Law enforcement and drug regulatory agencies from 20 African countries brought to dismantle the organized crime networks behind regional pharmaceutical crime. Photo Credit: INTERPOL

By Enoch Agombire Aya-ane, Research and Programmes Officer, WACCE
Date: 29 July 2026

Illicit economies are an important part of the security picture in West Africa. In a recent 2025 study by the Global Initiative Against Transnational Organized Crime (GI-TOC) which mapped 18 countries, 350 different illicit hubs were uncovered. Around 70 of those hubs, or one in five, were assessed as significant drivers of conflict, violence and instability. Most were concentrated in the Sahel, Central Africa and northern Nigeria.

These markets include gold, livestock, drugs, weapons, fuel and other goods. However, they do not all have the same effect. For many people, informal trade is a source of income where formal employment and state services are limited. The security risk becomes greater when armed groups exploit these markets to raise money, obtain supplies, control territory or build relationships with local communities.

Understanding that difference is important. The goal is not to treat all informal trade as criminal or all traders as security threats. It is to identify the markets and locations where illicit activity is helping armed groups become stronger.

This explainer aims to define illicit economies, outline how they contribute to instability in West Africa, and explore what this means for Ghana going forward.

WHAT ARE ILLICIT ECONOMIES?

Illicit economies are markets that operate outside, or partly outside, the rules and oversight of the formal economy. They can involve smuggled gold, stolen livestock, weapons, drugs, fuel and other goods.

In West Africa, these markets are often closely connected to legitimate trade. The same roads, border crossings, traders and transport networks can carry both legal and illegal goods. GI-TOC’s 2025 mapping found that 87% of identified illicit hubs were located near major roads, showing how important transport corridors are to both licit and illicit trade. This explains why border regions are particularly complex, as these areas make enforcement difficult. In many cases, cross-border trade is essential to civilians’ livelihoods, and a road used to move smuggled gold may also be the road used by farmers to reach a market. A border crossing used for illicit goods may also support thousands of legitimate traders.

Illicit economies themselves can provide civilians with their livelihoods as well, especially in communities that have few formal economic opportunities. Others are controlled by criminal groups or armed organizations. The important question is therefore not simply whether an economy is informal or illegal, but who controls it, who benefits from it and whether it contributes to violence or instability.

THE FIVE MARKETS MOST CLOSELY LINKED TO CONFLICT

GI-TOC identifies five illicit markets as particularly important to conflict dynamics in West Africa: extortion and protection racketeering, arms trafficking, cattle rustling, kidnapping and illicit gold trading. The organization refers to these as “accelerant markets” because they can help armed groups expand their resources and influence.

Arms trafficking is particularly important because weapons allow other forms of criminal activity to become more violent. In the 2025 mapping, arms trafficking appeared in roughly three-quarters of the West African hubs most strongly linked to instability. Cattle rustling and gold smuggling provide easy ways to collect payments and make money outside of formal systems. Kidnapping and extortion allow armed groups to extract resources directly from communities and business, and enforce their power through fear.

These markets therefore provide more than money. They can give armed groups access to transport, weapons, supplies and local information. In some areas, they can also help armed groups establish relationships or control over communities and present themselves as an alternative source of authority.

THE GHANA CONNECTION

Ghana is connected to these regional markets through its borders, ports, gold mining sector, and financial system.

Northern Ghana is particularly important because it sits next to the Sahel’s conflict zone. Since 2024, JNIM has expanded further south, and Ghana’s Upper West Region provides logistical access to supplies including fuel, motorbikes and explosives. Gold smuggling throughout the region is a known vector of terrorist financing, and Ghana is Africa’s top gold producer. While GI-TOC and other sources have found no evidence that JNIM is currently directly exploiting or taxing northern Ghana’s gold, the current lack of regulation and widespread illegal practice called “galamsey” make the sector vulnerable vulnerability to exploitation.

Further, Ghana’s Port of Tema is one of the West African entry points where authorities continue to report significant seizures of tramadol and related synthetic drugs. GI-TOC’s 2026 research found that a significant share of illicit tramadol entering West Africa is transported through maritime ports, with some of the supply then moving north toward consumer markets in the Sahel and North Africa. Other risks include the sharp increase in use of new digital financial platforms, like mobile money (MoMo). In April 2026, mobile money transactions in Ghana reached GH¢493.2 billion across 967 million transactions. There were 83 million registered accounts and 26 million active accounts, with more than 500,000 active agents.

This growth is an important achievement in financial inclusion. But a large and accessible financial system can also be exploited for illicit finance. Ghana’s 2024 National Anti-Money Laundering, Counter-Terrorist Financing and Counter-Proliferation Financing Risk Assessment identifies the country’s exposure to money laundering and terrorist financing risks, including vulnerabilities associated with its position as a regional trade and financial hub.

WHY IT MATTERS

Illicit economies matter because they can gradually weaken the authority of the state. When an armed group taxes a road, controls a market or protects a smuggling route, it is doing more than raising money. It is exercising control over economic activity. This can make armed groups harder to defeat. They can use the revenue to buy weapons and supplies, while their control over local markets can give them information and influence.

But the relationship between illicit economies and conflict is not always direct. Many people who participate in informal markets are not supporting armed groups. They are trying to earn a living. This is particularly important in northern Ghana, where economic vulnerability remains high. Ghana’s latest multidimensional poverty figures show that the North East and Savannah regions have poverty rates above 50%, more than twice the national rate of 21.9%. The 2020 Ghana Multidimensional Poverty Index found that 80.8% of people in the then-Northern Region were multidimensionally poor, compared with 45.6% nationally.

These figures do not mean that poor communities are more likely to support extremist groups. They show why enforcement has to be designed carefully. If authorities shut down informal markets without creating viable alternatives, they can remove people’s livelihoods without removing the underlying demand for those markets. Crackdowns that target illicit economies without offering economic alternatives risk destabilizing the very livelihoods they are meant to protect, and deepening the same distrust these communities already feel towards government actors that have never supported them in the past. Durable responses require something more patient: formalizing key sectors, as GoldBod is attempting with gold; supporting community resilience, as WACCE and its partners do across the northern regions of Ghana; and disrupting the accelerant markets specifically, rather than a blanket enforcement that punished regular civilians as well.

KEY TAKEAWAYS

Illicit economies are not a separate problem from insecurity.  They are deeply connected to West Africa’s wider economy, and provide livelihoods for many people. However, armed groups also rely on the same markets to raise money, obtain supplies and strengthen their influence. Criminal networks use insecurity to protect their businesses. Communities sometimes depend on informal markets because the formal economy does not provide enough opportunities. This creates a difficult policy problem.

GI-TOC’s 2025 mapping identified 350 illicit hubs across 18 countries, with 70 assessed as significant drivers of conflict and instability. Five markets were particularly associated with conflict: extortion, arms trafficking, cattle rustling, kidnapping and illicit gold trading.

Roads and borders are especially important. 87% of mapped illicit hubs were near major roads, showing how closely illicit trade is connected to the same infrastructure used by legitimate commerce. The warning from the Sahel is clear. Once armed groups gain control over trade routes and local economies, reversing that control becomes much more difficult.

Ghana is exposed to these regional networks, particularly through its northern borders and gold sector. The response cannot be enforcement alone. Governments need to disrupt the parts of illicit economies that finance violence while protecting legitimate livelihoods and bringing vulnerable sectors into the formal economy. For Ghana, early action matters. The country has not experienced the terrorist violence seen in Burkina Faso, Mali or Niger, but its northern regions are already connected to the wider regional economy. Stronger border controls, financial monitoring, gold-sector formalization, regional intelligence sharing and better economic opportunities can reduce the space available to criminal and extremist networks before they become more deeply established.