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Observatory of Illicit Economies in Eastern and Southern Africa


Summary highlights

  1. Ammunition theft raises fears of increased volatility and political violence in KwaZulu-Natal.

    Amid the political violence and looting that has gripped South Africa after the imprisonment of former president Jacob Zuma, in July some 1.2 million rounds of ammunition were stolen from a container yard in Durban, KwaZulu-Natal province. At the time of theft, the ammunition was not being stored in a high-security facility, raising urgent questions about how this high-risk shipment was handled. This ammunition, in conjunction with the flood of illegal weapons in recent years, may help fuel criminal and political violence in this already volatile region, which has the highest rate of political assassinations in the country.

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  2. Madagascar’s vanilla industry has become a magnet for corruption, money laundering and criminality.

    Around 80% of the world’s vanilla is grown in the mountainous regions of Madagascar. Extraordinary price rises in recent years have been a boon for smallholder farmers and vanilla exporters in Madagascar, but have also brought rising criminality. Organized and violent thefts of vanilla have become widespread, as well as money laundering through the sector and related corruption and speculation. However, the market is now changing, and criminal activity has followed suit. In response to falling prices, the Malagasy government has imposed minimum prices for vanilla exports, but this move has provided an opening for new forms of money laundering and corruption. Thefts have also emerged in up-and-coming vanilla-growing regions.

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  3. Somalia proposes reforms to fishing licences – will they curb corruption related to illegal fishing?

    Somalia’s Ministry of Fisheries and Marine Resources has announced plans for a new law that will aim to streamline its fishing licensing regime and close loopholes that enable illegal, unreported and unregulated (IUU) fishing. The announcement comes just weeks after a Global Initiative Against Transnational Organized Crime (GI-TOC) report in which we reported that vessels engaging in IUU fishing in Somali waters are often enabled by actors within government institutions. One of the government officials named in the report was Mohamud Hayir Ibrahim, minister of finance in the Federal Government of Somalia. Documents seen by the GI-TOC show how Ibrahim has seemingly been involved in irregularly procuring paperwork for the North East Fishing Company, a Somali fishing concern. Ibrahim’s activities suggest that abuse of government positions, and not only a fragmented fishing licensing system, has undermined attempts to curb IUU in Somalia.

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  4. Worrying signs for elephant conservation as data shows 2020 rise in black-market ivory prices.

    Recent GI-TOC analysis has found that reported prices for illegal ivory rose in 2020 – the first increase since the peak of global ivory prices in 2014. Rising prices, along with the disruption to ivory supplies caused by the pandemic, may be a warning sign of increased illicit ivory trade in future, and a threat to the successes in countering elephant poaching in East and southern Africa.

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About this issue

In July 2021, the world watched as South Africa descended into unprecedented chaos and looting following the imprisonment of former president Jacob Zuma. Authorities have reported that at least 342 people lost their lives during the civil unrest. But the long-term death toll could be much higher, due to just one incident: amid looting in Mobeni, south of Durban, an enormous cache of ammunition was stolen from a container yard, the vast majority of which has not been recovered by police. These 1.2 million rounds of ammunition, in the hands of criminal groups, could have a knock-on death toll even greater than that seen in the deadly days of civil strife in July.

This is the largest-ever reported loss of ammunition from civilian or police sources in South Africa. However, it follows several major scandals involving police firearms being channeled to gangs, and gangsters being able to abuse monitoring systems to acquire firearms licences, weapons and ammunition. The Durban ammunition will enter a criminal underworld that is already awash with illicit firearms.

The three other stories in this issue focus on environmental markets, from wildlife to agricultural products. Organized crime in the vanilla market in Madagascar shows how high-value agricultural products can become targets for criminal activity, money laundering, speculation and theft. This is not without parallels elsewhere in East and southern Africa: in a previous issue of this Bulletin we reported on criminal groups targeting avocados and macadamia nuts – both high-value cash crops – in South Africa and its neighbours.

The Malagasy vanilla market has, in some ways, been shaped by criminality. Laundering of profits from illegal logging reportedly contributed to a price bubble that saw Madagascar’s vanilla crop reach record prices in 2018, where vanilla was traded at a higher price per kilo than silver. The sky-high prices incentivized criminal groups to orchestrate vanilla thefts, often stealing the produce directly from the vine. Thefts of ‘green’ vanilla unready for market also lowered the overall quality of Malagasy vanilla exports and has contributed to prices falling in recent years.

Similarly, our analysis of ivory black-market prices also shows how integrated the licit and illicit economies can be. In the aftermath of the global financial crisis, research suggests that ivory prices rose as the commodity became sought after as an investment, much like other high-value commodities such as gold. As record gold prices in 2020 have again shown, these kinds of commodities rise in price amid financial uncertainty and crisis. We have found that ivory prices have risen again in 2020. While it is too early to be certain, it may be the case that the economic uncertainty of the COVID-19 pandemic has driven illicit actors to invest in this high-value commodity.

The final illicit environmental market we report on in this issue is IUU fishing, and how regulatory mechanisms aimed at preventing illegally caught fish have been undermined in Somalia by officials abusing their positions of power. As with the vanilla trade in Madagascar, the challenge lies in ensuring international supply chains remain transparent and accountable.