AnalysesArmed Violence

How Are Terrorists In Nigeria Funding Their Violent Campaigns?

Money makes the world go round. But in the hands of terrorists, it has ruined millions of lives. How are they getting so much of it to sustain their operations?

Nigeria has been in a long-drawn battle with violent terror organisations for over a decade. These groups break up, expand, contract, and form new alliances as their strength either intensifies or wanes. Whatever happens, they have remained a threat to the safety of lives and property, and one key reason is their access to funding. 

In 2009, the country only had to deal with Abubakar Shekau’s Boko Haram, which had established a base in the Northeast and became more vicious following the founder’s death. 

Now, there are other jihadi extremism groups, such as Ansaru and the Islamic State West Africa Province (ISWAP), which have gradually made inroads into other parts of Nigeria. There is the Indigenous People of Biafra (IPOB) in southeastern Nigeria, which launched a militia in 2020. There are also unyielding terror groups in the Northwest and North-central regions, known locally as bandits and identified by the authorities as ‘Yan Bindiga (gunmen) and ‘Yan Ta’adda (terrorists).

Because of how widespread these groups are and other kinds of unrest, the bulk of Nigeria’s military personnel is deployed across all of its 36 states.


Recognising that it needs to cut terror organisations’ financial lifelines as part of counterterrorism efforts, Nigeria passed the Terrorism Prevention Act, which outlaws financing acts of terrorism. The law, initially passed in 2011, was updated this year with attention paid to the problem of financing.

Despite existing laws, terror groups scattered all over the country continue to oil their engines of violence with money from various sources. So, how are they getting this access? Some answers are in the latest National Inherent Risk Assessment of Terrorist Financing report published by the Nigerian Financial Intelligence Unit (NFIU).

Some of the sources identified are wide and varied. There are donations from followers and sympathisers who operate in the legitimate part of society, the proceeds of paid ransoms, and money from involvement in arms trade. Criminality contributes, with terrorist groups getting involved in car snatching, cattle rustling, and human and drug trafficking. Money also comes from supporters who make their livelihoods in the “grey economy”, like artisanal mining, begging, market control, and unofficial land leases. Terror groups leverage their reputation for violence with extortion rackets and protection levies. 

The report noted that the money spent by terror groups flows through banks, Point of Sale (POS) operators, money changers (bureau de change), gold dealers, car dealers, and lottery companies. They are also known to transport cash using trusted couriers. Moving funds between countries is made easier because of Nigeria’s porous borders as well as ongoing conflicts in neighbouring Sahel countries.

Other terrorist funding sources, according to West Africa’s intergovernmental anti-money laundering group, include community raids, legitimate proxy business outfits, payments of zakat, the transport business, trading in kola nuts and dry fish, and the sale of looted gold jewellery.

Ideological terror groups like Boko Haram, Ansaru, and ISWAP have received donations from foreign sympathisers and international terror networks such as the Islamic State and Al-Qaeda.

Meanwhile, IPOB is known to raise funds from members of the public and Nigerians in the diaspora, especially those living in Brazil, Britain, China, Germany, India, Indonesia, Ireland, Italy, and Malaysia. It is also believed to receive funding from Norway, Russia, South Africa, Senegal, Spain, Sweden, Thailand, Turkey, Ukraine, and the United States of America. These contributions are funnelled through online platforms and overseas bank accounts.

The group also makes money from levies and voluntary donations by members locally.

ISWAP’s more sophisticated governance structure and its closer interaction with the locals make it easier for it to collect taxes and protection levies. The International Crisis Group observed in a 2019 report that residents in communities controlled by it generally agree to be taxed as they credit the terror group “for creating an environment where they can do business and compare its governance favourably to that of the Nigerian state”.

In one of its publications released last year, ISWAP revealed that it collected nearly $157,000 in zakat (annual tax paid by Muslim locals) in two months. Farmers and fishermen in ISWAP-controlled areas this year fled the regions partly due to unbearable taxes. The Islamic State affiliate even recently started collecting taxes in CFA franc, the note spent in neighbouring Franchophone countries, to circumvent Nigeria’s currency redesign policy.

“Terrorist actors are able to turn vulnerable populations in North Eastern Nigeria, particularly those around islands in Lake Chad into a source of economic support,” notes the recently published risk assessment report. “To this end, illegal levies are imposed on traders, farmers and other business ventures in communities under its control.” 

Also topping the list of revenue sources is kidnapping for ransom. The National Risk Assessment Forum estimates, based on data collected by law enforcement agencies, that Boko Haram received about $19 million in ransom payments just between 2019 and 2021.

In 2013, Boko Haram received $3.15 million before releasing seven French hostages and three years later, got another €3 million as part of a deal to release 21 Chibok schoolgirls. The pattern repeated itself with the 2021 Jangebe schoolgirls abduction, 2021 Kankara schoolboys abduction, the Kaduna train abduction this year, and countless other incidents.

SBM Intelligence estimates that at least $18.34 million was paid to kidnappers in Nigeria between 2011 and 2020 and ₦653.7 million ($1.47 million) between June 2021 and June 2022.

Terror gangs operating in northwestern and north-central Nigeria use the millions of dollars squeezed out from kidnap victims to buy more sophisticated arms. 

The groups, like ISWAP, also charge protection levies and illegal taxes. According to the risk assessment report, law enforcement data shows that about ₦91 million ($204,900) was raised by a few communities in one northwestern state and handed to a terrorist gang in the last quarter of 2021 alone. Between 2019 and 2021, “another law enforcement source documented ransom payments including levies/taxies imposed on communities totalling ₦364 million ($819,500)”.

Apparently disturbed by this trend, Nigeria’s senators passed a law in April to make the payment of ransom to secure an abductee’s release punishable by imprisonment.

In its 2016 money laundering and terrorist financing report, the National Risk Assessment Forum explained how terror groups benefited from human trafficking.

“Parents of young persons, especially males, are tricked by recruiters for the [Boko Haram] sect to allow them take their children to the big cities to learn the Quran and some forms of trade,” the report stated. “However, these kids are smuggled out of the country to the ‘Sahara’ (Northern Mali) to be trained as terrorists while attending to the daily chores of AQIM members. AQIM lords, in turn, give monetary compensation to the recruiters.” 

Boko Haram is known to engage in fish trading too. HumAngle reported in 2020 how the group controls the international trade of smoked fish and dry pepper in the Lake Chad region, encouraging fishing, levying fishermen, securing access to markets for traders, and taxing buyers per carton of fish.

Drug trafficking is another major source of revenue, especially for Boko Haram, which smuggles Tramadol, an often abused prescription opioid, outside the country.

“The group trafficks illicit drugs easily for cash or weapon exchange. For instance, two arrested Boko Haram kingpins who headed the Tramadol trafficking ring had frequented the Zinder market in the Niger Republic for their nefarious activities. They specifically trafficked Tramadol from Lagos, Nigeria, to Libya, where they exchanged their drug consignment for weapons,” said the latest terror financing assessment report.

Nigeria appears to be taking the dangers of terror financing more seriously. Asides updates made to the Terrorism Prevention Act this year to elaborate on what constitutes terrorist financing, there are talks of more collaboration between the Army and the Economic and Financial Crimes Commission (EFCC) to “choke” terrorists’ funding sources.

Last October, the Nigeria Security and Civil Defence Corps (NSCDC) established a financial crimes department that will investigate terrorism financing and money laundering.

But the country still has a long way to go. The 2022 Basel Index, which measures money laundering and terrorist financing risks around the world, ranks Nigeria as the 17th worst out of 128 countries. This means the country is vulnerable and does not have enough capacity to deal with the challenges.

“A multi-dimensional approach is necessary for the fight against terrorist financing,” proposes researchers Kangdim Dingji Maza, Umut Koldaş, and Sait Aksit. 

In the case of Boko Haram, this would involve strengthening the operational capacity of relevant government agencies, encouraging inter-governmental and multi-agency collaboration, prosecuting suspects, limiting the amount of territory controlled by insurgents, improving border security, and addressing factors that motivate people to join or associate with terror groups.


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'Kunle Adebajo

Head of Investigations at HumAngle. ‘Kunle covers conflict alongside its many intricacies and fallouts. He also writes about disinformation, the environment, and human rights. He's won a couple of journalism awards, including the 2021 Wole Soyinka Award for Investigative Journalism, the 2022 African Fact-checking Award, and the 2023 Michael Elliott Award for Excellence in African Storytelling.

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