The self-sustaining economics of conflict in Africa
In several corners of the continent, informal sectors have arisen to plug the gaps left by state weakness or absence, providing both a lifeline and a headache
MICHELE CATTANI / AFP
A Fulani herder leads his cattle to graze in the fields between Sevare and Mopti in central Mali on March 18, 2021.
The self-sustaining economics of conflict in Africa
For decades, Africa has been associated with internal armed conflicts. Today, it seems to be living up to its billing. From the Sahel and the de facto civil war in Sudan to local separatism in Cameroon and jihadist activity in Mozambique, there is barely a corner of the world’s second-largest continent that is not engaged in fighting.
Each case is different, but some common characteristics and patterns are discernible, such as when state security forces provoke a proportional increase in the activity of anti-government armed groups, prompting the expansion of national armies and law-enforcement agencies, and the formation of pro-government militias, which encourage additional recruitment of non-state armed actors and compel them to operate in a more coordinated manner.
Armed forces aim to dismantle bases and camps, cut off supply lines, and disrupt logistical networks, which in turn provokes attacks on military garrisons, increasing the seizure of territory and the expansion of supply lines, in what became a game of punch and counterpunch.
All the while, civilian populations suffer, victims not only of combat but of economic collapse. Production drops, trade falls away, access to land, pastures, and water is partly restricted, and prices for even basic goods rise. This affects societies, social bonds, traditional institutions, and trust in the state. As the state and its traditional regulatory mechanisms weaken, the influence of armed groups grows.
Based on trust, personal networks, and mutual obligations, the conflict economy is highly flexible and adaptive
Adapting to war
Although armed conflict drains resources, it does not eliminate economic activity. Trade goes on, but in a different guise, as traders are forced to adapt. This creates a conflict economy—an informal sector that operates beyond the reach of state regulation, tax, or official statistics. Incorporating everything from artisanal crafts to agricultural products, the conflict economy plugs the gaps left by the state.
Based on trust, personal networks, and mutual obligations, the sector is highly flexible and adaptive, functioning even under conditions of institutional instability. It extends beyond national borders and encompasses all social, ethnic, and religious groups. For many Africans, it acts as a lifeline and a source of income. Governments wonder whether it is best to preserve or integrate this informal economy.
This informal conflict economy runs parallel to an illegal, criminal sector that involves smuggling, corruption, illicit resource extraction, and the unauthorised movement of people and goods. Together, the informal and criminal components constitute the shadow economy of developing states. The balance between its legal and illegal elements varies by region, but its dynamics correlate closely with living standards.
A decline in the shadow sector—whether due to state pressure or other factors—tends to increase social tensions and shift the economy further toward criminalisation. In Mali, for instance, economic activities such as livestock trading, gold mining, and fuel transport are now largely controlled by armed groups.
Wherever state functions come up short, informal structures fill the gap. Distance plays a role. The farther a region is from the country's administrative and economic centres, the greater the influence of the shadow sector.
Under the impact of war, the shadow economy undergoes yet another change. Populations displaced by fighting and the destruction of infrastructure can be drawn either into armed groups/or into illicit activities. Armed groups that control territory become centres of power and de facto authorities, with their own institutions, systems, and sources of income, which are often related to the conflict.
Artisanal miners work in the Kamituga mine in the South Kivu province in the east of the Democratic Republic of Congo, on September 20, 2024.
In the Democratic Republic of Congo (DRC), decades of illicit mineral extraction have financed armed groups, making the conflict economy a self-sustaining system. Actors evade taxation, engage in smuggling, and trade with the local population. It can become a vicious cycle: declining profitability in legitimate economic activity leads to further economic criminalisation, which in turn fuels further violence.
Repressive measures by national armies and law enforcement against populations involved in the conflict economy only reinforce and accelerate it. Violence becomes a catalyst. The civil war in Sudan illustrates the destructive nature of a conflict economy, with the extraction, smuggling, and sale of gold financing the war for one side (the RSF) in the absence of any state control. The conflict economy acts as a structural mechanism of societal collapse. On the one hand, it is a consequence of instability; on the other, it perpetuates and intensifies it.
No help coming
The international community has done little, if anything, to counter the conflict economy in Africa. European states are finding that they have waning influence, and the cuts to humanitarian aid from the United States have had a similar effect. China, a big investor in Africa, does not interfere in other states' internal affairs and generally funds and builds infrastructure projects in non-conflict zones, but some Chinese and Gulf state operators are interested in resources of questionable origin.
African regional organisations such as the African Union or ECOWAS have limited capacity to act, and the United States' foreign policy approach is still taking shape. Russia remains directly engaged in armed operations against non-state armed actors in Africa through the export of security, but its approach extends beyond a military presence to initiatives in sectors such as food and energy.
The geopolitical actor offering the most favourable terms to African governments is likely to become the key partner that shapes policy in areas such as education, culture, and healthcare. The dynamics of conflict economies are likely to persist in the absence of a concerted effort that encompasses conflict resolution, rebuilding trust in state institutions, improving living conditions, and integrating the informal sector into the formal economy.
