North African countries like Algeria, Egypt, Morocco and Tunisia have, for decades, been tormented by a toxic melange of recurring social unrest, spiralling corruption, porous borders and poor governance. This has created favourable conditions for the emergence and sustenance of various illicit markets in the region. As a result, transnational organised crimes such as trafficking in antiquities and cultural artefacts; human smuggling and trafficking; illicit arms proliferation and wildlife crimes have been flourishing.
North Africa is a source, transit region and destination for a variety of smuggled and contraband goods and products. These include various staple commodities, fuel, cigarettes, alcohol and medicines. The region is also affected by illicit transfers of weapons and drugs across borders.
There are four key drivers of the boom in illicit markets. First is the difference in prices for the same goods between neighbouring countries, as well as the ease with which those goods or products can be obtained. Differences in tax regimes and subsidies contribute to smuggling across borders. One example is fuel, which is highly subsidised in countries like Algeria and Libya, creating an incentive for the product to be smuggled into neighbouring Tunisia.
The second driver is the porosity of borders. Historical and cultural connections among North African countries have long had an impact on the notion of boundaries, especially for populations living in border regions. Algeria, for instance, has seen numerous efforts undertaken in recent years to improve border security. Despite this, illicit trade, especially with Tunisia and Libya, has continued to grow.
It is evident that today, North Africa’s porous borders pose a real threat to efforts to combat transnational organised crime. They also represent a serious security threat, especially following the collapse of regimes in Libya and Tunisia, which once exerted control over a number of illegal markets. The historically porous borders that cross the Sahara Desert continue to attract criminal networks with extensive knowledge of smuggling routes.
The third driver is political instability, bad governance and corruption, which continue to abet organised crime in the region. As Alexander Babuta and Cathy Haenlein point out in Commodity Smuggling in the Maghreb: A Silent Threat, political instability in North Africa since the Arab Spring has exacerbated many challenges. Economic dynamics have been altered, and the ‘opening up [of] existing routes and markets’ led to the creation of ‘new opportunities for exploitation by a broader range [of actors]’.
Political, economic and social factors contribute to the growth of smuggling networks, which thrive in border regions that are mostly underdeveloped and where the presence of state law enforcement agencies is limited. In such areas, most people depend on the revenues from so-called border economies. Illicit trade networks create options and job opportunities for border populations, which makes combatting them even more difficult.
These networks also gain influence over time. In the case of Libya, for instance, since 2011, parallel ‘informal institutions’ and processes have been developed and are easily exploited by high-profile criminal groups such as terrorists.
Corruption remains a major issue in North African countries, affecting the lives of citizens at multiple levels. It is rooted in the relationship between individuals and state institutions, especially border regions, which have weak state controls. Ineffectual border security enhances opportunities for criminal networks to operate and prosper. This situation is the direct result of decades of collusion between such networks and law enforcement authorities or border government representatives, which has ‘created a culture of low-level corruption that terrorist groups can exploit’.
From a security point of view, the nexus between organised crime and terrorism represents a serious challenge. The proximity of illicit trade to other high-profile organised crimes like arms trafficking and terrorism is a major threat. Smugglers, arms traffickers and terrorist groups share the same routes. Even when they are not structurally connected, these actors interact with each other to ensure all sides benefit. One example is the control of territories and smuggling routes; or alliances built between smuggling groups and the local tribes that control border regions. The interplay between criminal and terrorist groups is an evolving phenomenon.
The fourth contributor to illicit markets in North Africa is the large informal economy linked to organised crime, which, for decades, have played a role in the growth of illicit trade in the region. State economies in North Africa rely significantly on the informal sector, which contributes 54% of Tunisia’s gross domestic product, 45% of Algeria’s and 20% of Morocco’s.
Illicit trade has a devastating impact on legal markets and on state revenues. For instance, the amount of tax revenue lost to Tunisia in 2017 is estimated at TND2.6 billion. In the absence of economic alternatives for border communities, however, the elimination of cross-border smuggling would paralyse entire regions and cause greater social unrest.
It would also have an impact on the stability of countries such as Libya, where revolution and conflict have weakened the state’s authority to an extent that has enabled the growth of all forms of criminal activity, including illicit trade. Here, competition for resources and benefits is harming the political transition and undermining the consolidation of the state.
Efforts to eliminate illicit trade should not be limited to strengthening border security. Rather, the root causes of the phenomenon must be addressed. To this end, the affected countries should adopt a regional approach that addresses factors like price differences by adopting a common tax regime and revising subsidy systems. They should also address systemic corruption at national levels, which plays a major role in the proliferation of the practice.
Rim Dhaouadi, Researcher, ENACT project, ISS