Terrorist attacks are expensive — weapons, fighters, logistics and training all require funding. Yet this aspect receives far less attention than the attacks themselves.
In Nigeria and across Africa, terrorist groups have become more independent than when they were heavily dependent on foreign sponsors who allegedly wanted to “steal African resources” or “divide Africa.” Today, they operate like criminal enterprises, generating revenue through kidnapping, smuggling, extortion, illegal mining and digital financial networks.
The picture that is almost always painted today is that terrorism is primarily sustained by foreign supporters who benefit from the instability and chaos. However, this perception is slowly becoming outdated.
While there is no dispute that external funding continues to play a role, research and international assessments show that extremist groups have become incredibly independent, slowly integrating themselves into regional economies and taking advantage of gaps in governance to operate effectively in plain sight of both governments and citizens.
This creates a dangerous cycle where violence is not only a political, religious or ideological tool but a very lucrative business.
Following the Money
A 2025 assessment by the United Nations Counter-Terrorism Committee Executive Directorate (CTED) found that terrorist financing across Africa has become increasingly diversified. Rather than relying on a single source of revenue, more often than not, terrorist groups operate through multiple streams of income.
As mentioned in the report, major sources of funding for terrorist groups operating across the continent include kidnapping for ransom, extortion, illegal taxation, trafficking networks, natural resource exploitation, and informal financial systems.
The military may hinder their operations during combat, rescue missions, or interception of plans, but dealing with the financial and structural backing is the main concern and the most problematic part of disorganising their operation. Without addressing the sources of income, terrorist groups can bounce back even after suffering huge operational setbacks.
Kidnapping: Terrorism’s Most Reliable Revenue Stream
Some activities demonstrates the monetisation of terrorism clearly. In Nigeria, for example, ransom payments have become a very profitable criminal operation in recent years. The contrast between a criminal organisation and terrorism is becoming progressively blurred across Africa.
Research on terrorism financing in Nigeria shows that kidnapping serves both financial and strategic purposes. One thing abductions do is to generate income by the collection of ransoms, creating fear and weakening public confidence in the government.
They run on a simple business model — getting hostages, torturing them, and then putting pressure on communities, families, businesses, and the government to pay a ransom for their release. People, families, and communities go ahead to negotiate with the kidnappers out of fear for the life of the hostages, secretly, even when public policy/government directives discourage the payment of ransoms.
The economic benefits are powerful.
A single successful operation can generate enough revenue to purchase weapons, recruit fighters, and finance future attacks. In January 2026, the family of an abducted doctor in Edo State reportedly paid ₦50 million, equivalent to about €31,861, to secure his release.
The case was not uncommon. In Nigeria, ransom payments have become an underground economy worth billions of naira annually, financing terrorist operations, providing weapons, recruiting fighters, and supporting logistics. This means that every successful ransom payment does not just free a victim; it unintentionally sponsors future violence.
The Hidden Wealth
The funding of terrorist operations does not stop with kidnapping and ransom payments. Across Africa, terrorist groups have increasingly turned to unregulated natural resources for revenue. This is them discovering loopholes in governance and using Africa’s rich resources.
The CTED assessment highlights how terrorist and armed groups exploit poorly regulated mining regions, taxing miners, controlling access routes, and aiding smuggling operations. Gold, in particular, is very precious, expensive, portable, hard to trace and easy to incorporate into legitimate supply chains, which makes gold very valuable for terrorist groups and a huge challenge for authorities.
Control of mining operations is a steady and reliable source of income for terrorist groups, particularly where the presence of government is weak. These revenues are generated in Africa and therefore immune to international sanctions or financial restrictions, unlike donations or foreign assistance.
The tragic irony here is that the resources meant to support national development are fuelling underdevelopment and financial instability.
Extortion and the Rise of Parallel Governments
Taxation is perhaps the most overlooked aspect of terrorist financing.
The terrorist groups build a system or structure that resembles a government administration in an informal way in the weakly governed areas. They tax local businesses, farmers, and drivers of public transport vehicles for the privilege of operating a business.
Research into Boko Haram and other terrorist groups in Nigeria suggests that the groups operate in a highly organised manner. Some of the more extremist groups manage to extract a reliable and dependable income by integrating themselves into local economic operations, rather than relying solely on criminal operations and violence.
This is a disturbing trend. Communities living with insecurity and terrorist attacks on a day-to-day basis may find themselves unwittingly sponsoring the very groups that terrorise them.
The way communities sponsor terrorist operations is not voluntary, and it allows terrorist groups to operate with a degree of financial security that regular counterterrorism strategists miss or fail to notice.
Digital Finance Creates New Challenges
To a large extent, digital finance (fintech) has transformed and re-engineered the financial system, helping to create an inclusive economy in Nigeria and Africa. But the same transformation and breakthroughs that the fintech sector brings to make transactions easier can also open the door to exploitation and abuse.
The UN assessment warns that sponsors of terrorism are increasingly exploiting weaknesses in financial monitoring systems, especially where regulatory bodies and policies struggle to keep pace with technological advances in the finance sector.
Actions aimed at tracing illegal funds may be hampered by digital wallets, informal payment service systems, cryptocurrencies, and international digital payment systems. This does not imply that the fintech sector causes terrorism.
Digital financial services are not the end goal, but a vital means to economic development and inclusion. The key challenge is to ensure regulatory bodies can evolve quickly enough to keep pace with the ever-changing fintech environment and identify abuse.
The financing of terrorist operations is becoming more sophisticated, and, like military intelligence, financial intelligence is becoming more important.
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Operation Catalyst and the Scale of the Threat
The trend toward growing sophistication in terrorist financing was illustrated by INTERPOL’s 2025 Operation Catalyst, one of the biggest organised counterterrorism financing operations carried out on the African continent.
The operation involved many African countries and many arrests related to investigations into the financing of terrorism. Authorities announced suspected links to organised criminal activity, money laundering, and illegal international financial activities.
The findings supported an important point: terrorist financing is not a discrete or isolated phenomenon. It cuts across other forms of local and international crime systems such as trafficking, smuggling, fraud, and illegal trade. The interrelation between these networks makes detection difficult and provides terrorist groups with access to funds through multiple channels simultaneously.
Why this matters (security aside)
The problem with financing terrorism is not just poor law enforcement. Money obtained through kidnapping, extortion, illegal mining or money laundering is diverted from beneficial and important national economic activity. It discourages investment, weakens governance, and slows development.
Violence exacts far more devastating costs on countries already under economic pressure than its immediate consequences. It poses greater risks to businesses and costs communities their people and ways of life.
What Happens Next?
The results show that fighting terrorism requires more than military skills.
As long as there is a structured and secure financial environment for terrorist groups, they can inflict more damage, reorganise, restrategise and carry on with their operations.
The challenge for African governments is therefore not only to fight the “recruited fighters” but also to break and destroy the financial and economic structures that support their activities.
Unless the business model is dismantled, the cycle of violence cannot be stopped.
Editor’s Note: The opinions expressed here by Impakter.com columnists are their own, not those of Impakter.com — In the Featured Photo: A young Somali girl runs in front of an African Union Mission in Somalia (AMISOM) armed personnel carrier on August 6, 2012, in the Somali capital Mogadishu. August 6 marks the anniversary of Al-Qaeda-affiliated extremist group Al Shabaab’s withdrawal from fixed positions in Mogadishu after having steadily lost territory to forces of the Transitional Federal Government (TFG) backed by troops from the African Union Mission in Somalia (AMISOM), ending their draconian stranglehold on the capital and its population. Featured Photo Credit: AMISOM Public Information.
