As the battle for Mosul continues, Islamic State’s position in the Middle East has weakened. Yet the terrorist organisation’s influence is growing in North Africa.

 Shadow government operations will be facilitated by the return of North African foreign fighters who went to Iraq or Syria to fight for IS. According to the International Centre for Counter-terrorism at the Hague, nearly 1,000 North African-born IS members have returned from the Levant. This is in addition to the 5,000 IS militants that never left Libya and have fought in the country’s civil war. This number will continue to increase as IS loses territory in Iraq and Syria.

Islamic State is thus not necessarily in decline or retreating as many analysts have suggested. Rather, the Islamic State will likely redirect its efforts toward fragile countries in North Africa and enact the same shadow government growth methodology utilised in Syria and Iraq.

A 2016 report from the United States’ National Countererrorism Center claimed Islamic State (IS) had established branches in Libya and Egypt by June 2016 and mapped out its aspirational growth trajectory within the region. Islamic State has operated there as a shadow government and consolidated its pseudo-governmental institutions via the employment and empowerment of locals.

The group’s state-like functionality has been critical to sustaining itself. Its claim to be the caliphate can only be legitimised so long as it governs territory. Therefore, in order to retain territory, IS has expanded its operations and networks into Africa. Western political analysts and IS likewise view the governments of Libya, Egypt, Somalia and Sudan as fragile, with Libya closer to being failed state. Libya, Egypt, Somalia and Sudan all rank in the bottom 8 per cent of the World Bank’s political stability index. The instability of these adjacent countries is mutually reinforcing, since non-state actors can cross borders with few government restrictions. The same phenomenon of interstate freedom of movement facilitated Islamic State’s rise in the Levant.

An obvious question is whether IS has enough money to employ people while losing territory and revenue streams in the Levant. Islamic State has collected tax from communities and sold women into slavery; as it conquers and governs more territory, its revenue streams expand, allowing for territorial consolidation. This mercantilist growth model has been successful in the Levant and can potentially translate to its Saharan conquests.

Additionally, North Africa presents advantageous strategic opportunities to IS. North Africa provides access to the Gulf of Aden for maritime operations, and to the Mediterranean for human trafficking networks and significant oil reserves. Since 2007, Somali pirates have netted US$7 billion (AU$9.1 billion) in piracy operations from raids in the Gulf of Aden. This potential revenue provides IS with the opportunity for growth.

Redirection toward North Africa will provide IS with long-term relevance, but the group faces serious obstacles. Less than 1 per cent of Muslims in Libya, Egypt and Somalia are Shiite. This might seem to be an advantage, given that IS is notionally Sunni, but the in-group ethnoreligious dynamics that helped fuel the rise of IS in the Levant would be absent from North Africa. The splintering of ethnoreligious groups in Iraq and Syria created divisions that aided the organisation’s recruiting efforts. Moreover, existing organisations in the region, such as the Muslim Brotherhood and Al Shabaab, will make it difficult for IS to become the premier revolutionary group. Islamic State overcame this issue in Syria and Iraq; however, IS had better insight into community needs in those places.

The Islamic State’s growth and longevity depend on its adjustment to new strategic environments. As IS exhausts its resources and political capital in the Levant, it is establishing a new base for its caliphate in North Africa. According to former CIA analyst Michael Shurkin, IS “in Libya is down but not out, and in the meantime, all of Libya’s other problems remain, which ensures that [IS] or something a lot like it will have little problem reasserting itself when the time is right.”

While IS loses ground in the Middle East, it will redirect its efforts toward North Africa to survive and remain relevant. As IS consolidates its presence in North Africa over the next few years, it may be able to govern disgruntled populations in a region craving stability and economic opportunity after the Arab Spring.

Trevor Alexander is an intern with the AIIA National Office. He is completing a master of strategic policy at the Crawford School of Public Policy at the Australian National University.

This article is published under a Creative Commons Licence and may be republished with attribution.