DARK DIV­I­DEND

Africa’s crim­i­nal ecosys­tem has evolved from set­ting up beach­heads in failed states to in­te­grat­ing it­self into richer, more sta­ble states with their greater money-laun­der­ing and trans­port op­por­tu­ni­ties

Financial Mail - - FEATURE - Michael Sch­midt michael.sch­midt@riseup.net

The greater po­lit­i­cal free­dom that has come to many African coun­tries over the past three decades, and their open­ing to world mar­kets, has brought a dark div­i­dend — the pro­lif­er­a­tion of highly ef­fi­cient crime syn­di­cates.

Th­ese syn­di­cates have easy ac­cess to arms thanks to, among other things, the chaos in Libya af­ter the death of Muam­mar Gaddafi in 2011 and peace ac­cords in coun­tries like Mozam­bique. About 100-mil­lion small arms and other light weapons are be­lieved to be stock­piled or in cir­cu­la­tion in Africa, a rich re­source for crim­i­nal gangs seek­ing weapons to help them pro­tect their routes and cre­ate new mar­kets.

Three sep­a­rate stud­ies con­ducted re­cently show, among other things, that the trade in Colom­bian co­caine via West Africa and Afghan heroin via East Africa is soar­ing, with po­lit­i­cal elites and crime syn­di­cates work­ing hand in hand; and that tax avoid­ance by multi­na­tional com­pa­nies, par­tic­u­larly in the ex­trac­tive in­dustries, is equiv­a­lent to 11.6% of trade lost to Sub-sa­ha­ran Africa.

The re­search was con­ducted by the Thom­son Reuters Foun­da­tion’s Wealth of Na­tions project, Global Fi­nan­cial In­tegrity and En­act, a three-year, Eu-funded project aimed at com­bat­ing transna­tional or­gan­ised crime in Africa. One of the part­ners in the En­act project is the Global Ini­tia­tive Against

What it means: Crim­i­nal syn­di­cates are spread­ing ever-wider in Africa, due in part to the fall of tyrants

Transna­tional Or­gan­ised Crime, whose di­rec­tor, Mark Shaw, says that in Africa such crime falls into three broad, linked sys­tems:

● Il­licit prod­ucts flow­ing into and through Africa — pri­mar­ily drugs, weapons and shady fi­nan­cial ser­vices;

● Re­sources orig­i­nat­ing in the con­ti­nent and sold abroad — mainly blood di­a­monds and other il­le­gally mined met­als and min­er­als, il­le­gally logged tim­ber, stolen oil, poached ivory and rhino horn, en­dan­gered species, plus il­le­gal, un­re­ported and un­reg­u­lated (IUU) fish catches; and

● Cy­ber­crime, mi­grant smug­gling, and the pro­duc­tion of coun­ter­feit goods, in­clud­ing medicines.

Shaw says all three ar­eas are wors­ened by “con­flict, weak gover­nance or the preva­lence of cor­rup­tion”, and the very di­ver­sity of the crim­i­nal land­scape — from the man­u­fac­ture of fake lux­ury brands and cig­a­rette smug­gling to hu­man traf­fick­ing and piracy — com­pli­cates pol­icy and law-en­force­ment re­sponses.

Or­gan­ised crime has dis­torted African economies and pol­i­tics, trans­form­ing Guinea-bis­sau, for ex­am­ple, into ar­guably Africa’s first “narco-state” by 2008, as mil­i­tary and po­lit­i­cal fac­tions col­luded in es­tab­lish­ing a co­caine pipe­line whose prof­its dwarfed the coun­try’s GDP.

In con­trast to re­gions such as Latin Amer­ica, “the study of or­gan­ised crime has not been pri­ori­tised in Africa”, says Shaw. He says Africa’s crim­i­nal syn­di­cates had their be­gin­nings in small-scale, lo­calised op­er­a­tions in the late 1980s like rhino-horn smug­gling in South­ern Africa or crude-oil theft in the Niger Delta, but within a decade th­ese groups had co­a­lesced and be­come more pro­fes­sional.

The Delta oil thieves are so well or­gan­ised and po­lit­i­cally pro­tected to­day that they tap di­rectly from well­heads and trans­fer their crude to “le­git­i­mate” tankers off­shore, ac­count­ing for up to 400,000 bar­rels a day or 15% of to­tal pro­duc­tion.

Vast amounts of money are in­volved: il­le­gal log­ging is worth $17bn a year, un­taxed gold ex­ports cost Ghana more than $6bn a year in lost rev­enue, IUU fish­ing costs West Africa $2.3bn a year, coun­ter­feit anti-malar­ial drugs are a $400m-a-year in­dus­try in West Africa, cy­ber­crime costs Africa $895m a year, and the theft of re­fined fuel in Libya is con­ser­va­tively worth $200m a year.

Com­pli­cat­ing mat­ters, il­le­gal mar­kets are

Gallo Images /Foto24 /Deaan Vivier

Gallo Images /AFP /Sam Yeh

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