Assessing the Impact of Escalating Terrorism in Togo and the Sahel on Regional and Global Investment Risks

In the volatile crossroads of West Africa, the Sahel region remains a critical nexus of geopolitical and economic tension. For investors, the interplay between surging terrorism, shifting alliances, and resource-driven development demands a nuanced understanding of risk and opportunity. Togo, a small but strategically positioned country, exemplifies this complexity. As the Sahel's instability spills into coastal West Africa, the implications for energy, infrastructure, and stability-linked investments are profound—and increasingly urgent.

The Sahel's Escalating Threats: A Catalyst for Geopolitical Reconfiguration

The 2025 Global Terrorism Index (GTI) paints a stark picture: the Sahel accounts for 51% of global terrorism-related deaths and 19% of attacks, with Togo recording its worst year since the index's inception. Jama'at Nasr al-Islam wal Muslimin (JNIM) has claimed responsibility for 41 of Togo's 52 terror-related fatalities in 2024, a 238% increase from the prior year. These attacks, often originating from northern Togo's porous borders with Burkina Faso and Niger, underscore the region's fragility.

The Sahel's instability is no longer confined to its heartland. Togo's Savanes region, a gateway to regional trade, has become a flashpoint for cross-border violence. Meanwhile, the Gulf of Guinea's piracy risks—a persistent threat to maritime logistics—compound the security challenges. For investors, the Sahel's transformation into a “security battleground” signals a shift in risk paradigms. Traditional Western military partnerships are waning, replaced by alliances with Russia and China, which are reshaping the region's political and economic architecture.

Energy and Infrastructure: High Stakes in a Shifting Landscape

Togo's economic revival hinges on its role as a logistical hub. The Lomé-Ouagadougou-Niamey corridor, a $470 million IMF-backed project, aims to position Togo as a regional trade gateway. The Port of Lomé, with its 48-hour ship turnaround time, is a critical asset. Yet, terrorism and piracy risks threaten these ambitions.

In the energy sector, Togo's phosphate and limestone reserves are attracting foreign direct investment (FDI), particularly in sustainable cement and fertilizer production. Companies like Heidelberg Materials and NutriSource are capitalizing on Togo's industrial revival, supported by zero corporate tax incentives in the Industrial Free Zone. However, the Sahel's geopolitical realignment complicates these gains. The Alliance of Sahel States (AES)—Mali, Niger, and Burkina Faso—has pivoted toward Russia and China, sidelining Western influence. Russia's Wagner Group and its successor, the Africa Corps, now dominate security contracts and resource extraction, particularly in uranium and gold.

China's Belt and Road Initiative (BRI) has further entrenched its presence in the Sahel. In Niger, China National Petroleum Corporation (CNPC) operates a 90,000-barrel-per-day oil pipeline, while in Mali, Chinese firms hold stakes in lithium mines critical for the global energy transition. However, these investments are not without friction. The Nigerien junta recently expelled Chinese oil executives over labor disputes, and Mali's government has cracked down on illegal Chinese mining operations. Such tensions highlight the growing assertiveness of Sahelian states in managing foreign capital—a trend likely to intensify as resource nationalism gains momentum.

Geopolitical Risk and Investment Strategy: Navigating the New Normal

For investors, the Sahel's evolving dynamics present both hazards and opportunities. The region's resource wealth and strategic location remain attractive, but the risks of political instability, terrorism, and regulatory unpredictability cannot be ignored.

1. Energy Sector: Balancing Security and Growth
   Uranium and gold are now central to the Sahel's economic strategy, with Russia and China driving exploration and extraction. However, sanctions or geopolitical clashes (e.g., AES's diplomatic rift with Ukraine) could disrupt supply chains. Investors should prioritize diversified portfolios, hedging against resource nationalism and sanctions risks.

2. Infrastructure: Resilience Over Speed
   Projects like the Lomé-Ouagadougou-Niamey corridor require long-term stability. While Togo's infrastructure investments are laudable, investors must account for cross-border security threats. Partnerships with regional actors like the African Development Bank (AfDB) or the World Bank, which offer risk-mitigation tools, could provide safeguards.

3. Stability-Linked Sectors: Innovation as a Hedge
   The Sahel's energy poverty and vulnerability to desertification create demand for decentralized solutions. Solar microgrids (e.g., Schneider Electric's projects) and AI-driven water management systems are gaining traction. These technologies offer resilience against geopolitical shocks and align with global ESG trends.

The Road Ahead: Strategic Recommendations

• Diversify Exposure: Avoid over-concentration in any single Sahelian market. Togo's stability relative to its neighbors makes it a safer bet, but investors should pair its assets with less volatile regions in West Africa.
• Engage with Local Partners: Collaborate with regional governments and institutions to navigate regulatory shifts. For example, the AES's 0.5% import levy on foreign goods could fund infrastructure projects if aligned with local priorities.
• Monitor Geopolitical Shifts: Track the AES's evolving alliances with Russia and China. Sanctions, military interventions, or diplomatic realignments could trigger market volatility.
• Leverage Technology: Invest in security-tech startups and climate adaptation firms to mitigate operational risks.

Conclusion

The Sahel's transformation into a geopolitical flashpoint is redefining investment logic. While terrorism and instability pose significant risks, the region's resource endowments and strategic location offer compelling opportunities for those willing to navigate the complexities. For Togo, the path to economic resilience lies in balancing infrastructure development with security innovation and geopolitical agility. Investors who approach the Sahel with a long-term, adaptive mindset may find themselves positioned to capitalize on one of the world's most dynamic—and volatile—frontiers.