People often say that criminal activity is like a balloon: if you squeeze at one end, the air will shift and pop up somewhere else. Similarly, you can try to crack down on smugglers – for example, by restricting their use of land routes – only to find they are using sea routes instead. This is why targeted interventions often have limited impact on criminal activity: they need to look at the big picture, to tell the whole story of how the air moves in the balloon.

Africa is the world’s second fastest-growing economy after East Asia, and yet the continent is also home to the largest share of people living in extreme poverty, in countries with poor foundations for human development. Income inequality is rising, while underemployment and the lack of economic opportunities push some individuals to join criminal groups, gangs or rebel movements, reinforcing the links between inequality, criminal activity and violence.

The negative impact of illicit financial flows (IFFs) on development goals increasingly features on international political agendas. This publication seeks to build evidence on IFFs and their impact, by looking at the relationship between criminal and illicit economies, and their generated revenue in West Africa. The report moves beyond traditional efforts to measure IFFs towards developing a qualitative understanding of how these activities affect the economy, governance, development and human security. It proposes a framework for analysing the diverse ways in which these economies and IFFs threaten development and human security for West African citizens and states. It concludes with recommendations to develop an integrated response to these activities and the networks that perpetuate them, which addresses the enabling environment and seeks to mitigate their impacts on the most vulnerable populations.

This chapter reviews the key characteristics of the West African region that are relevant both to understanding the growth of criminal economies, and their interactions with citizens and the state. These issues include the development and demographic status of West African countries, and the dynamics of the region’s economy and trade. The chapter provides an overview of the region’s governance and democracy, and highlights salient features of its peace and security, or instability. Taken together, these characteristics impact on the way criminality develops in the region. Consequently, they are relevant for developing responses to criminality and illicit financial flows, and working to mitigate the impact of these factors on development.

This report has identified several often overlapping or mutually reinforcing criminal economies operating in West Africa. They use different methods, and are enabled by networks of both domestic and international actors. This chapter proposes an analytical framework for understanding the implications of criminal economies and their IFFs, based on three factors: where the good is sourced and whether there is a local market; the actors or networks involved; and where the IFFs are earned and invested. Applying this analytical framework conveys the nature and scope of the criminal economy in question, the underlying actors, interests and incentives behind it and the priority for harm-mitigating responses. It then provides a brief look at 13 different forms of criminal economies, according to a three-part typology: illegal activities, illicit trade in legal goods and illicit resource extraction. Each case provides an overview of the scale of the flow, the geographic area of vulnerability, the key actors involved, and the implications and impacts of illicit financial flows.

Based on an analysis of illicit financial flows (IFFs), this report establishes an analytical framework for understanding the harm that can be generated by criminal economies in order to guide and prioritise responses, both by the states in the region and the international community. These conclusions were drawn from an analysis of 13 forms of illicit or criminal economies operating in the region, organised by a typology distinguishing between illegal activities, the illicit exploitation or commodification of natural-resource assets, and the illicit trade in normally legal goods. This final chapter concludes with several observations and recommendations that draw on commonalities, but are also targeted at the development, finance and trade, and security and justice sectors. It draws on the report’s findings to determine a way for state and non-state actors to plan and co-ordinate their responses.

The following methodology applies to the scoping or baseline study, the more detailed case studies (to be published as Working Papers) and this final synthesis report.