Rising Jihadi Threat in West Africa: Implications for Geopolitical Risk and Commodity Markets

The Sahel's descent into chaos has become a defining geopolitical risk of the 2020s. By 2025, the region accounts for nearly half of global terrorism-related deaths, with jihadi groups like the Islamic State in the Greater Sahara (ISGS) and al-Qaeda's Jama'at Nasr al-Islam wal Muslimin (JNIM) expanding their reach into coastal West Africa. For investors, the implications stretch far beyond security concerns—they ripple through commodity markets, infrastructure projects, and agricultural supply chains. Côte d'Ivoire, Ghana, Burkina Faso, and Togo, once seen as relative safe havens, now face indirect but profound economic consequences from the Sahel's instability.

Gold: A Magnet for Migrants, a Minefield for Investors

The Sahel's gold-rich regions—particularly in Mali and Burkina Faso—have become battlegrounds. As violence escalates, artisanal miners from these countries are fleeing to Côte d'Ivoire and Ghana, where they've swelled the ranks of informal mining operations. This influx has boosted local gold production but at a cost: environmental degradation, labor disputes, and regulatory challenges. For example, Côte d'Ivoire's gold output rose by 12% in 2024, yet 60% of this increase came from unregulated artisanal mines, according to the World Bank.

The paradox for investors is clear. While gold prices remain elevated due to geopolitical tensions, the sector's profitability in West Africa is undermined by volatility. Companies like AngloGold Ashanti and IAMGOLD, which operate in the region, face rising operational risks, including supply chain disruptions and community unrest. For now, gold remains a “safe haven” asset, but its local production is increasingly a double-edged sword.

Agriculture: A Sector on the Brink

The Sahel's agricultural collapse is a ticking time bomb for regional food security. In Burkina Faso, over 1.1 million internally displaced people—many of them farmers—have abandoned their land, reducing crop yields by 30% in conflict-affected zones. This displacement has spilled into Côte d'Ivoire and Ghana, where displaced populations strain local resources and drive up competition for arable land.

For investors, the agricultural sector's vulnerability is twofold. First, food prices in West Africa are projected to rise by 15–20% in 2025 due to reduced cross-border trade and supply chain bottlenecks. Second, agribusinesses reliant on Sahelian inputs—such as fertilizer and livestock—are facing higher costs. The FAO's Food Price Index for West Africa hit a 10-year high in Q1 2025, signaling a shift in regional economic dynamics.

Infrastructure: A Race Against Time

Infrastructure development in the Sahel and its neighbors has been stymied by security concerns. Projects like Togo's planned rail link to Ghana and Burkina Faso's new energy grid have faced delays due to fears of attacks on construction sites. The World Bank estimates that infrastructure investment in the region has fallen by 25% since 2022, with private-sector participation declining as risk premiums rise.

The ripple effects are stark. Côte d'Ivoire's port of Abidjan, a critical hub for Sahelian trade, has seen cargo volumes drop by 18% in 2024 as traders avoid routes near conflict zones. Meanwhile, Ghana's Ashanti Goldfields Highway, a key artery for gold exports, now requires private security escorts—a cost that eats into margins. For infrastructure investors, the Sahel's instability has turned once-promising projects into high-risk propositions.

Investment Implications: Navigating the New Normal

The Sahel's instability demands a recalibration of risk assessments. For gold, the focus should shift from production volume to corporate resilience. Investors should prioritize firms with diversified operations and strong community engagement, such as those adopting blockchain for supply chain transparency. In agriculture, opportunities lie in climate-resilient crops and vertical farming ventures in urban centers like Abidjan. Infrastructure investors, meanwhile, must weigh the trade-off between high returns and security costs—favoring projects with government-backed insurance or regional partnerships.

The bottom line: The Sahel's crisis is not a temporary blip but a structural shift. Investors who ignore its implications risk overexposure to a region where volatility is the new norm. Yet, for those who can navigate the risks, there are opportunities in sectors that prioritize adaptability—be it in gold, agriculture, or infrastructure. The key is to balance caution with innovation, ensuring that investments align with both market realities and the region's fragile geopolitical landscape.