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Rajoelina and the saga of Madagascar’s smuggled gold

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Rajoelina and the saga of Madagascar’s smuggled gold

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Malagasy President Andry Rajoelina is evidently not very fond of South Africa. And vice versa. When he toppled Marc Ravalomanana in 2009, his predecessor fled to South Africa. The country was instrumental in ensuring Madagascar’s suspension from the Southern African Development Community (SADC) for his unconstitutional change of government.

When SADC pressured both men not to run in the 2013 elections because of their toxic personal rivalry – leaving it to Hery Rajaonarimampianina to emerge as president – South Africa was at the helm of the SADC initiative. In March 2019 Rajoelina, perhaps in retaliation, irked Pretoria by skipping SADC’s Western Sahara solidarity conference in South Africa to attend Morocco’s rival meeting instead.

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Does this prickly history explain Rajoelina’s reckless decision to sever air links with South Africa since April? Or is it all about gold?

In April, Madagascar lifted its two-year Covid-19-induced ban on international travel allowing commercial flights to resume from Turkey, La Réunion, Mayotte, Mauritius, Ethiopia and France. But not South Africa, which harmed Airlink – the only commercial airline flying the direct South Africa-Madagascar route. It also hit business people and tourists who have had to take costly roundabout journeys.

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Airlink and Pretoria were mystified by the decision, wondering if it was because of South Africa’s association with Ravalomanana. Or perhaps a deal gone sour between Rajoelina’s political party and a South African company to buy aircraft?

Or was it because of 73.5 kg of unwrought gold bullion found in the hand luggage of three Malagasy nationals? The passengers had tried flying from Madagascar through Johannesburg and via Addis Ababa to Dubai in December 2020. South African authorities arrested the men for attempted smuggling of contraband and confiscated the gold and some US$20 000 in cash.

Last month Madagascar’s Council of Ministers confirmed the gold and dollars were behind the flight ban. After its 13 July meeting, a statement said: ‘The President of the Republic, however, insisted that all measures to combat the smuggling of national resources must be strengthened. That is why the air routes connecting Madagascar to South Africa have not been opened yet; as it is still awaiting the signing of an agreement or “Memorandum of Understanding” (MOU) to ensure the prevention of the smuggling of national wealth.’

It added that Rajoelina had also reaffirmed Madagascar’s demand for the return of the 73.5 kg gold ‘illegally exported to South Africa’ and the extradition of the three Malagasy couriers. The gold’s origin remains a mystery.

After the arrests, the Parpia Gold and Jewels Trading company – licensed in Dubai – claimed to be the gold’s legal owner. It said the precious metal was bought in Mali and the couriers were lawfully transporting it from Mali via Madagascar, South Africa and Addis Ababa to Dubai. But the story didn’t add up. For one thing, Parpia could only account for 3 kg of gold bought in Mali. So the couriers, and the loot, remained in custody.

Meanwhile Rajoelina sent his foreign minister to meet President Cyril Ramaphosa and plead for the gold’s return and the extradition of the three couriers. Since then, Madagascar’s extradition attempts have apparently been suspended pending attempts to elicit a favourable decision from Pretoria.

The wider context of this strange saga is that South Africa is a key transit point for bullion smugglers channelling the precious metal to and from Dubai. In 2021 Daily Maverick reported that a smuggling syndicate possibly operating from Madagascar had been using South Africa as a conduit to reach Dubai – one of the world’s most prolific players in the gold industry.

The report quoted Marcena Hunter, a Senior Analyst at the Global Initiative Against Transnational Organized Crime, saying that in terms of illicit gold networks, ‘South Africa is a major cog for the Southern Africa region. Illegal mining in the country is rife and most of Zimbabwe’s gold is still thought to go through South Africa.’ According to Hunter, most of the gold smuggled out of Africa ends up in Dubai‘s souks where few questions are asked about its origins.

Daily Maverick also quoted the Minerals Council South Africa saying that the government was losing millions in royalties and taxes from the booming illegal mining industry. ‘In December, Interpol flagged illegal gold mining as a source of financing for terrorist groups in parts of Africa, which means the products of these activities – gold that often ends up in other parts of the world – could indirectly contribute to terrorism,’ Daily Maverick said.

In the case covered here, the confiscated gold bars and greenbacks are now probably worth just over US$4-million. Not to be sneezed at, but enough to cut air links with South Africa? Madagascar’s overreaction and the Rajoelina administration’s obsession with the case suggest the diplomatic spat is less about Madagascar’s national interest and more about the personal interests of high-up people in Antananarivo.

After the gold was seized in Johannesburg, 12 people were arrested in Madagascar, including senior officials. Bureaucrats insisted that the smugglers had smartly evaded customs on departure, but the media demonstrated convincingly that their aircraft had been searched. So bribery is suspected.

One observer even speculates that Rajoelina slapped the ban on Airlink because someone in South Africa didn’t keep their end of the bargain and was cut out of the Madagascar supply chain. Hunter told ISS Today that this wouldn’t have much impact on illicit gold flows from Madagascar, as these could still reach Dubai via Ethiopia.

For a customs official to take a bribe to pass a consignment of gold may be routine. But it is the intense interest at the top – perhaps the very top – that raises real questions.

Written by Peter Fabricius, Consultant, ISS Pretoria

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