Northern Mali and the governance frontier

Peace & Security,Sahel Watch23 Jun 2016Nancy Benjamin

Several years of research on the informal economy in West Africa give a perspective on the Sahel and Northern Mali and the following message for policymakers: invest in the informal sector. Recent surveys and interviews with informal businesses and public officials in the Sahel echo this message. Investing in the informal economy is a means of expanding the alternatives for young people, thereby avoiding violent extremism and migration.

This expert opinion is part of our Sahel Watch living analysis

The conflict in Mali has its roots in history, but can also be seen as a product of current economic, ecological, political, security and geopolitical developments in the region.

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It is often observed that life in the north of Mali is precarious – business is risky, agriculture is uncertain, and safety not secure. Malian authorities have pointed out that this kind of fragility – particularly the lack of stable livelihoods – makes people vulnerable to political violence and violent extremism. However, they also note that the economically-precarious livelihoods in the north are well-rooted in tradition. Sahelian and pastoral agriculture has always been affected by weather and may not provide a full-time occupation nor a full-time income. Commerce is a long tradition, but usually requires mobility over long distances to source products and find markets. The recent challenges with political violence need to be seen in this context.

Thus, trafficking in smuggled, subsidized Algerian gasoline may be relatively new, but arbitraging prices across the Sahel is not. And while the illegal smuggling of drugs and contraband may be relatively new in the region, it hardly offers a stable livelihood alternative for most traffickers. Although contraband generates income for many, as with most illegal activity, the revenue concentrates at the top, and the risk, as well as the potential for conflict among traffickers, is high. Interviews with Sahel residents indicate a firm preference for legal trade, even though it may generate a lower income, over tangling with illegal business and competing groups of illegal traffickers.

Localized risks and migration

This raises another important issue for northern Mali: some of those who end up in violent groups are there by force of circumstance, meaning that they did not have any options. Options include the ability to leave for another town. Those with the means to leave or with family or connections in another city are best placed. Without income alternatives or the means to leave, circumstances render some people involuntary recruits. Legal options in informal economic activities could prevent involuntary recruitment and the government could enhance such income alternatives through a variety of interventions, such as improvements in basic security and the control of territory. Closely related is more orderly border management, one that is more integrated with central systems, which may require special dispensation of taxes, but would standardize public control. Finally, infrastructure to support agriculture would support the more stable residents.

For those who do leave, Niger is becoming a common first stop. The control of the Algerian border has been tightened and more international migrants are looking to Niger for routes across Libya to the Mediterranean coast. Those who become stranded are ripe for recruitment by violent groups, such as Boko Haram. The income gap between Africa and Europe will remain a strong draw for migrants for some time, but stranded would-be migrants are less likely to fall into violent activity if informal economic options are available.

Governance and investment

The advantage of the informal economy is that it offers open entry and opportunity for those with little education and no capital, although in the most precarious informal activities. Even so, not all of the informal economy is precarious. The informal sector is the backbone of economic activity in the Sahel. Besides a small number of formal firms and the few jobs they offer, all businesses are informal. And these support many stable livelihoods and long-term investments. Unfortunately, the long traditions of the informal economy do not include broad and deep civic contributions. For example, the extensive networks of traders and itinerant merchants also have a long tradition of avoiding taxes.

Rather than leaving informal businesses to their own devices, the government can help to serve their need for collective services, as well as the needs of informal workers. In most West African countries, the economic contribution of the informal economy could be enhanced while businesses remain informal, and these businesses are in fact willing to increase their public payments if they can be guaranteed the kind of public services they seek.

The north of Mali lacks a government presence, and lack governance generally. And yet to function well, the North’s communities and its informal economies require some governance. If this governance is not provided by the government, then informal – and possibly violent groups – will step in. In the absence of a functioning state, the informal economy provides some stability amid the fragility. The government should invest in this informal economy and help provide for its collective needs while working to re-establish order in the region.