Assessing the Impact of Islamist Insurgency in West Africa on Commodity and Infrastructure Investment Risks

The Sahel and coastal West Africa have become epicenters of Islamist insurgency, with profound implications for global commodity markets and infrastructure investment. From 2023 to 2025, the region has witnessed a sharp escalation in terrorist activity, driven by groups such as Jama'at Nusrat al-Islam wal-Muslimin (JNIM) and the Islamic State in the Greater Sahara (ISGS). These groups have expanded their reach beyond traditional strongholds in Mali, Burkina Faso, and Niger, spilling into coastal states like Benin, Togo, and Ivory Coast. The resulting geopolitical instability has triggered capital flight, disrupted trade corridors, and exacerbated commodity price volatility, creating a high-risk environment for investors.

Geopolitical Instability and Commodity Volatility

The Sahel accounted for 19 percent of global terrorist attacks and 51 percent of terrorism-related deaths in 2024, according to the 2025 Global Terrorism Index. This surge in violence has destabilized key economic sectors, particularly artisanal gold mining and agricultural trade, which are critical to regional and global supply chains. For instance, the tri-border zone between Mali, Côte d'Ivoire, and Burkina Faso-a vital trade corridor-has been disrupted by insurgent attacks, leading to supply chain bottlenecks and price spikes in commodities like gold and cocoa.

The spread of violence into coastal West Africa has further compounded risks. In 2024, Benin and Togo recorded 173 and 69 fatalities, respectively, from Islamist attacks. These incidents have not only strained local governance but also deterred foreign investment in agriculture and mining. The displacement of over 110,000 people from the Sahel to coastal states since October 2024 has added pressure on local resources, exacerbating inflationary pressures and supply-side constraints.

Global commodity markets have also been indirectly affected. The 2025 Global Commodity Price Correction report notes that Sub-Saharan Africa's reliance on raw material exports-such as oil, gold, and cocoa-has left the region vulnerable to dual shocks: falling global demand and regional instability. For example, Nigeria and Angola, major oil producers, face economic strain as global prices decline, while countries like Ethiopia and Rwanda have found some resilience through coffee exports according to the report.

Capital Flight and Infrastructure Investment Risks

Political instability and security threats have driven capital flight from the Sahel and coastal West Africa. The withdrawal of Burkina Faso, Mali, and Niger from the Economic Community of West African States (ECOWAS) in January 2025 has fragmented regional economic cooperation, reducing cross-border trade and investment. This fragmentation has been compounded by the rise of alternative security partnerships, such as with Russia's Wagner Group, which have prioritized short-term military solutions over long-term economic development.

Infrastructure projects, particularly in energy and transportation, face heightened risks. The W-Arly-Pendjari (WAP) Complex-a transboundary conservation area near Benin, Niger, and Burkina Faso-has become a focal point of cross-border security challenges, detering investment in eco-tourism and renewable energy projects. Additionally, the use of drones by both state and non-state actors for surveillance and targeted strikes has increased the cost and complexity of infrastructure development, particularly in rural and border regions.

The Sahel's instability has also prompted a reallocation of public resources toward security, diverting funds from critical infrastructure. In Mali, for instance, the government has prioritized military expenditures over road and energy projects, further eroding investor confidence. This trend is mirrored in coastal states like Togo, where political tensions and constitutional amendments have created an uncertain business climate.

Strategic Implications for Investors

For investors, the interplay of geopolitical instability, commodity volatility, and capital flight presents a complex risk landscape. The Sahel's reliance on artisanal gold and agricultural exports makes it particularly vulnerable to supply shocks, while coastal states face risks from maritime crime and smuggling networks according to recent analysis. The growing link between terrorism and illicit trade-such as human trafficking and arms smuggling-further complicates the security environment.

However, opportunities exist for investors willing to navigate these challenges. Countries like Côte d'Ivoire and Senegal have shown resilience through economic diversification and new energy projects according to the report. Similarly, Ethiopia and Rwanda's success in leveraging coffee exports highlights the potential for value-added industries in the region according to the same report.

Conclusion

The Islamist insurgency in West Africa has transformed the Sahel and coastal regions into high-risk zones for commodity and infrastructure investment. Geopolitical instability, driven by extremist violence and political fragmentation, has exacerbated capital flight and commodity price volatility. While the situation remains dire, coordinated regional and international efforts-focusing on governance, security, and economic diversification-could mitigate these risks. For now, investors must weigh the potential rewards against the growing uncertainties in one of the world's most volatile regions.