Illicit trade of any form whatsoever affects both developing and developed nations alike. To add to it, if small arms are traded, the gravity of the situation tends to burgeon exponentially. Over the years, it has become evident that the illicit trade of small arms has developed itself into an industry; an enterprise.⁽²⁾ Illicit trade happens both within and between countries, specifically when licit small arms are detoured into illicit markets. There lies little scope for quantifying this form of trade, as these grey markets operate leaving little or no scope for accountability and traceability. The licit global small arms market is estimated at approximately US$ 4 billion a year and illicit trade is estimated at US$ 1 billion.⁽³⁾

This CAI paper explores how the small arms illicit trade market functions, what factors fuel its growth and what economic implications illicit trade in arms entails. It also highlights certain initiatives that have already been taken and certain policy recommendations that nations must pay heed to. It also offers a unique perspective on how fingers are pointed at Africa for supporting illegal activities of all forms, but what remains unknown to many is that these activities are funded and supported by nations outside Africa.

Defining the thin line between white and black

Although there may be no one particular definition on what is right and wrong when it comes to trade of arms, licit small arms can be defined as those possessed by states, police, and civilians in accordance with existing international conventions as well as national laws. Contrarily, illicit small arms are those which are possessed in violation of international/national conventions and laws, majorly acquired to suppress, overpower, asphyxiate and dominate the existence of a state, its people and its society at large.⁽⁴⁾

The distinctions and interactions between licit and illicit are complex. Distinguishing between licit and illicit small arms sales is a function of the status of the buyer (whether or not he is entitled to purchase an arm); status of the seller (whether or not the seller is legally authorised to sell arms); status of the weapon (whether it has been acquired through the sanctioned, lawful channel); and finally. details of the transaction (whether the exchange of weapon has been formally recognised and accounted for or not).⁽⁵⁾

Fuel to the fire: Growth factors

Illicit trade of small arms is not a one-time transaction; it has over the years slowly transformed into an enterprise which is as lucrative and profitable as any other form of business. There are certain aspects of this trade that stand out as stimulators, which if nipped in the bud can lead to curbing the outreach of small arms trade.

If principles of economics, particularly those of demand and supply, were to be used to analyse the small arms situation, one would be baffled by the vicious cycle this form of trade has morphed into. In general terms, if the demand of any commodity is to be curbed within an economy, it is advisable to bring down the supply level forcing the demand to diminish drastically. However, this concept does not apply to the trade of small arms. When demand is strong, and the licit supply of small arms is curtailed, those who seek arms, irrespective of the route they are required to take, will pursue illicit small arms even when the effective price is high.⁽⁶⁾

Drivers of small arms demand include social, economic, and political insecurity; demographics; governance problems; weak and corrupt law enforcement; inadequate opportunities for education and economic development; failure of states to protect the vulnerable; social and economic disparities; inadequate post-conflict disarmament; and embedded cultures of violence.⁽⁷⁾

It is not only the demand that acts as an impetus to the growth of illicit trade; the supply side is an equal contributing factor. The inabilities of a system to inhibit the growth of illicit trade at any stage where the arms change hands represent another driver. End-users, brokers, inter-country and intra-country borders, etc. have led to the blasphemous consequences Africa faces today. Inadequate end-user controls, lack of due diligence, corruption, and poor enforcement have allowed brokers and others to sell weapons in violation of arms embargoes.⁽⁸⁾

Moreover, it becomes tougher to keep illicit trade of small arms under check when there are no standard procedures or norms that facilitate the identification of a weapon and, more importantly, with whom the onus lies. An identification mark that distinguishes licit weapons from illicit weapons would not only help control small arms trafficking but would also help track the weapon back to the country of origin. Also, recordkeeping on the levels of imports and exports of commercial small arms shipments is uneven. Inadequate verification has allowed shipments to proceed using false, forged, or misleading documentation.⁽⁹⁾

Most nations, particularly in the African subcontinent, also lack statutory regulations and laws that penalise illicit trade. With no fear of the law and the consequences one's actions might bring about, individuals of the society are bound to break barriers as per their own convenience. In Papua New Guinea, the penalty for possession of prohibited arms is approximately 6-12 months in jail. In Uganda, it is US$ 8.50 as opposed to the heavy fine of US$ 3,000 in New Zealand.⁽¹⁰⁾

Where it all begins: Sources of illicit trade

As shown in the figure below, developing nations have slowly become host to illicit small arms markets. What remains more astounding is that developed countries are the ones which discreetly supply arms to these failing states. Primary weapons owned by the Lord's Resistance Army (LRA) in Uganda as well as most of the weapons found to be used in conflict zones, have been found to be Kalashnikovs and their derivatives as per various arms collection programmes and government stockpiles investigated by International Action Network on Small Arms (IANSA).

Looking more specifically at Kalashnikovs, most producers are located outside Africa, in at least 13 countries, namely Albania, Bulgaria, China, Germany, Hungary, India, Iraq, North Korea, Poland, Romania, Russia, Serbia, and Venezuela.⁽¹¹⁾ As of 2008, Egypt and South Africa were the only African countries that produce Kalashnikov derivatives. Of the two arms collection programmes surveyed by IANSA which have some data on manufacture, a low level of African-manufactured Kalashnikovs was revealed. Of 891 assault rifles found in the 2002-2003 Disarmament, Demobilisation, and Reintegration (DDR) programme of the Central African Republic, only 23 (3.5%) were South African Vector R5s. Furthermore, of 1,100 weapons collected by international peace-keepers in Ituri, eastern Democratic Republic of the Congo, a few seemed to be indigenously made in Africa or were locally procured and only one was Egyptian-manufactured, i.e. less than 1% were African-made.⁽¹²⁾

Who is buying arms

Figure 1: Who is buying and selling arms? ⁽¹³⁾

Several examples illustrate illicit small arms trade in Africa. United Nations experts investigating arms embargo violations in Somalia documented the delivery of arms to Somali militias by Ethiopian truck convoys. Similarly, Liberia under the rule and command of Charles Taylor transported many weapons which were provided to the Revolutionary United Front, a rebel army that fought a failed 11-year war in Sierra Leone, across the border in trucks. Rogue soldiers, rebels, refugees and others also walk across borders with one or two small arms at a time.⁽¹⁴⁾ Researchers from the Small Arms Survey claim that Malian arms smugglers pack small arms into waterproof sacks, attach them to the bottom of boats, and run them up the Niger River. In the Horn of Africa, the smugglers that ply the Gulf of Aden often use dhows — large, wooden-hulled vessels with distinctive triangular sails — to deliver large quantities of small arms from Yemen to Somali warlords.⁽¹⁵⁾

Amongst all sources, the most disheartening source remains the sale of illicit arms by states. In many cases, states have facilitated illicit sales of small arms to further their political or economic aims, relying on covert operations and complex networks to help cover their tracks.⁽¹⁶⁾ For example, the Government of Sudan has been an extremely important source of weapons for the Lord's Resistance Army (LRA), a rebel group in northern Uganda, providing AK-47 and G3 assault rifles, anti-tank weaponry (including B10 recoilless guns), 81 mm and 82 mm mortars, and landmines. In 2002, the Sudanese Government stopped supporting the LRA, in return for the Ugandan Government's agreement to end its support for Sudanese rebels.⁽¹⁷⁾

However, states cannot carry out these blasphemous acts on such a large scale by themselves. Government officials and private companies, working in complex global networks often operate as 'middlemen' in the distribution of small arms worldwide. Arms brokering is not illicit in itself, but arms brokers often exploit loopholes and weak regulation to bypass arms embargoes and supply arms to regions in which they are likely to be misused. 'Straw purchases' are instances in which small arms are bought licitly by someone with a clean record and then sold or given to a second owner. This is particularly a problem in jurisdictions without strong licensing and registration regimes governing both sale and resale. Reports from around the world illustrate the ways in which state-owned small arms leak into illicit markets through theft, corruption or other forms of diversion from military and police stockpiles.⁽¹⁸⁾

Giving states in Africa a run for their money: Economic impact of illicit trade

Armed conflicts facilitated by illicit trade of small arms not only lead to direct costs such as medical costs, military expenditure, the destruction of infrastructure, and the care for displaced people – which divert money from more productive uses – but has far more impinging consequences. The indirect costs indicate that each nation has a huge price to pay. The economy of a nation comes to almost a standstill, especially industries like tourism which are capable of contributing heavily to a country's gross domestic product (GDP). The country suffers from inflation, debt, and reduced investment, while people suffer from unemployment, lack of public services, and trauma. To top it all, the loss of life is one that cannot be priced nor neglected. The millions who lose their lives at the behest of such conflicts supported by illicit arms only worsen the situation.

The absence of a global regulatory framework resulted in at least US$ 2.2 billion worth of arms and ammunition being imported by countries under arms embargoes between 2000 and 2010. Africa loses around US$ 18 billion per year due to wars, civil wars and insurgencies. On average, armed conflict shrinks an African nation's economy by 15%.⁽¹⁹⁾ A civil war in one country reduces the growth rate of neighbouring countries by around 0.9%; thus the combined growth loss to neighbours can exceed the loss to the country itself. Effects become more marked as the conflict intensity increases.⁽²⁰⁾

Between 1990 and 2007, around US$ 300 billion have been lost by Algeria, Angola, Burundi, Central African Republic, Chad, Democratic Republic of the Congo (DRC), Republic of Congo, Côte d'Ivoire, Djibouti, Eritrea, Ethiopia, Ghana, Guinea, Guinea-Bissau, Liberia, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, South Africa, Sudan and Uganda combined as a result of armed conflict. This was nearly the same as the total amount of Official Development Assistance that the continent received during this time. The World Bank estimates that the economic cost of lost production due to conflict ranges from 2% to 3% of GDP.⁽²¹⁾

The Small Arms Survey estimates that small arms have resulted in hundreds of thousands of deaths and millions of injuries each year. They are further responsible for 60% to 90% of total conflict deaths. In the few African countries where reliable data is available, small arms are a leading cause of unnatural deaths. For example, up until the late 2000s, small arms were the principal cause of unnatural deaths (close to 30% of the total), more than road accident fatalities, in South Africa.⁽²²⁾

In a study conducted by Oxfam and IANSA, researchers Stewart and Fitzgerald studied nine African conflicts from 1970 to 1995; the average loss as percentage of GDP was 10.5% per annum. This was expected to be an under-estimate due to lack of data for four countries.⁽²³⁾

Figure 2: Cost of conflict for some selected nations in Africa (See table) ⁽²⁴⁾

Curing what could have been prevented: Initiatives taken so far

Some countries in Africa have already made significant efforts to prevent irresponsible transfers of weapons. In particular, two instruments have created new regional standards for arms control in a whole range of areas, including robust controls on international arms transfers. Firstly, the 2004 Nairobi Protocol for the Prevention, Control and Reduction of Small Arms and Light Weapons applies to countries in the Great Lakes region and the Horn of Africa. Under its aegis, at least 6 out of 11 African member states reviewed their standards and procedures for the management and security of stockpiles between 2001 and 2005. The Nairobi Protocol has led to the development of best practice guidelines on stockpile management. Secondly, in 2006, the Economic Community of West African States (ECOWAS) Convention on Small Arms and Light Weapons, their Ammunition, and other Related Materials was yet another initiative that aimed at establishing principles and norms on small arms and light weapons. It aims at prohibiting the possession, use, and sale of light weapons by civilians; encouraging licensing systems including the following criteria: minimum age; no criminal record or subject of a morality investigation; proof of a legitimate reason to possess, carry, or use; proof of safety training and competency training; proof of safe storage and separate storage of ammunition. It also requires a limit on the number of weapons a licence may cover; a waiting period of at least 21 days; expiration dates on licences and periodic reviews; seizure laws and revocation of licences for contraventions of possession laws; and adequate sanctions and penalties for illicit possession and use.⁽²⁵⁾

Though these acts and norms were implemented, their validity and impact remained questionable for quite some time. It soon became clear that national or even regional regulations are insufficient to prevent arms from reaching the hands of abusers. What was indeed required was international regulations.

Hence, in December 2006, 153 countries agreed to start developing an Arms Trade Treaty (ATT). A United Nations Group of Governmental Experts (GCE) began their work in January 2008 and presented their recommendations to the General Assembly in October 2008. The ATT is a potential multilateral treaty that would regulate the international trade in conventional weapons. The treaty was negotiated at a global conference under the auspices of the United Nations from 2–27 July 2012 in New York, but no consensus has been reached yet.

Since 1991, at least eight regional agreements covering more than 110 countries have touched on elements of civilian possession – typically in the context of armed violence prevention or efforts to address illicit trafficking and manufacturing. These agreements are either intended to be incorporated into participating states' national law, to guide the adoption of legislation meeting minimum requirements, or to set broad standards and norms. Four of the eight agreements are legally binding which are the European Weapons Directive, the Firearms Protocol of the Southern African Development Community, the Nairobi Protocol, and the Convention of the Economic Community of West African States.⁽²⁶⁾

African governments are also seeking changes at national level. Between 2001 and 2005, at least 10 African countries revised their laws and procedures on export controls; nine did so in relation to import controls and five on transit controls.⁽²⁷⁾

With difficulty in creating and establishing laws as well as measuring the efficacy of these laws, it is evident that the conventions, treaties and agreements, whether statutory or otherwise, have not borne fruit so far, however, with the increased involvement of many African nations; a lot of change can be expected in the near future. 

Conclusion

Though efforts have been made at regional, national and international levels, there is however still a lot of room for improvement. Policy makers over the years have suggested various steps which if implemented in a phased manner could lead to a more regulated small arms market. Apart from strengthening our existing laws and regulations, it has now also become imperative to consider regulating the activities of small arms brokers, improving effectiveness of transfer controls, destroying surplus arms, implementing a common system for marking and tracing weapons, etc.

Illicit trade of small arms is a problem that has existed for a long time but has been brought to light only in the past decade. It is of utmost importance to acknowledge the gravity of the current situation and come up with solutions with the help of political will and the commitment of states.

Africa has been tagged as the abode for failed nations for far too long, but as a continent it shows potential to be the land of hope and promise. It still has to rid itself of social and economic evils such as illicit trade of small arms, and although Africa has a long way to go, it has already begun walking the talk and there remains hope that as long as nations and organisations collaborate and choose to contribute for each other's betterment, there lies a bright future for Africa.

Written by Mridulya Narasimhan ⁽¹⁾

NOTES:

(1) Contact Mridulya Narasimhan through Consultancy Africa Intelligence's Finance and Economy Unit ( finance.economy@consultancyafrica.com). This CAI discussion paper was developed with the assistance of Gaylor Montmasson-Clair and was edited by Nicky Berg.
(2) Cukier, W., 'The illicit trade in small arms: Addressing the problem of diversion', Peacebuild, 2008, http://www.muntr.org.
(3) Ibid.
(4) Ibid.
(5) Ibid.
(6) Regehr, E., 'Reducing the demand for small arms and light weapons: Priorities for the international community', Project Ploughshares Working Paper 04-2, 2004, http://ploughshares.ca.
(7) Ibid.
(8) Greene, O. and Kirkham, E., 'Small arms and light weapons transfer controls to prevent diversion: Developing and implementing key programme of action commitments', Saferworld, August 2007, http://www.saferworld.org.uk.
(9) Schroeder, M. and Lamb, G., 'The illicit arms trade in Africa – A global enterprise', African Analyst, 2006, http://www.fas.org. 
(10) Parker, S., 2011. Balancing act: Regulation of civilian firearm possession. Cambridge University Press: Geneva.
(11) 'The AK-47: the world's favourite killing machine', Control Arms Campaign, Amnesty International, International Action Network on Small Arms and Oxfam International, 2006, http://www.amnesty.org.
(12) 'The call for tough arms controls: Voices from the Democratic Republic of Congo', Control Arms Campaign, Amnesty International, International Action Network on Small Arms, and Oxfam International, 2006, http://www.oxfam.org.
(13) Grimmet, R., 'Conventional arms transfers to developing nations, 1994-2001', Report for Congress, 2002, http://www.fas.org.
(14) Schroeder, M. and Lamb, G., 'The illicit arms trade in Africa – A global enterprise', African Analyst, 2006, http://www.fas.org. 
(15) Ibid.
(16) Bourne, M., 2007. Arming conflict: The proliferation of small arms. Palgrave: New York.
(17) 'Breaking God's commands: The destruction of childhood by the Lord s Resistance Army', Amnesty International, 18 September 1997, http://www.amnesty.org.
(18) Cukier, W., 'The illicit trade in small arms: Addressing the problem of diversion', Peacebuild, 2008, http://www.muntr.org.
(19) Basu Ray, D., 'The Devil is in the detail: The importance of comprehensive and legally binding criteria for arms transfers', Oxfam International, 2012, http://www.oxfam.org.
(20) Collier, P. and Hoeffler, A., 'Global crises, global solutions' Copenhagen consensus, Cambridge University Press, 2004.
(21) 'Africa's missing billions – International arms flows and the cost of conflict', Oxfam, International Action Network on Small Arms, and Saferworld, Briefing Paper 107, 11 October 2007, http://www.oxfam.org.
(22) Schroeder, M. and Lamb, G., 'The illicit arms trade in Africa – A global enterprise', African Analyst, 2006, http://www.fas.org.
(23) Ibid.
(24) 'Africa's missing billions – International arms flows and the cost of conflict', Oxfam, International Action Network on Small Arms, and Saferworld, Briefing Paper 107, 11 October 2007, http://www.oxfam.org.
(25) 'ECOWAS Convention on Small Arms and Light Weapons, Their Ammunition and Other Related Materials', Disarmament forum, 2008, http://www.unidir.org.
(26) Parker, S., 2011. Balancing act: Regulation of civilian firearm possession. Cambridge University Press: Geneva.
(27) Ibid.