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Sahel fuel smuggling and terrorist taxation: How ECOWAS subsidy reform created a Jihadist revenue haven along the Niger–Nigeria border (Magaria–Jibia Axis)

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  • Ayoki, Milton

Abstract

After the ECOWAS-backed abolition of Nigeria’s premium-motor-spirit (PMS) subsidy in June 2023, the pump-price gap between Nigeria and Niger widened overnight from 0.23 to 0.71 USD litre⁻¹. Using a difference-in-differences design that exploits (i) 400+ border checkpoints (Clingendael 2022 GIS), (ii) 13 241 ACLED road-block events 2020-24, and (iii) monthly NBS price panels 2010-24, we show that jihadist taxation revenue on the Magaria–Jibia corridor increased by 0.9–1.4 USD million per month (≈ 18 % of IS-Sahel’s estimated budget). A structural gravity model calibrated to OECD-SWAC trade elasticities implies that a 0.10 USD litre⁻¹ price gap raises the probability of an Islamist checkpoint by 6.3% (SE 1.7, p

Suggested Citation

  • Ayoki, Milton, 2025. "Sahel fuel smuggling and terrorist taxation: How ECOWAS subsidy reform created a Jihadist revenue haven along the Niger–Nigeria border (Magaria–Jibia Axis)," MPRA Paper 126590, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:126590
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    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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