Crack down on illegal business? No! Legalise it and collect taxes!

Thursday September 10 2020
oil hawker

A black market fuel hawker filling a car on the side of the road in Lagos, Nigeria in 2016. FILE PHOTO | AFP


The Democratic Republic of Congo has been knocking on the door of the East African Community, and looks likely to get a seat at the table in the near future.

It is bringing with it a problem — or in my view opportunity. The DRC government recently announced a plan to crack down on illegal and clandestine private ports operating in the country.

The ports enable illegal trade in minerals, timber, and other goods, so Kinshasa is bringing out the whip, to help the state Commercial Company of Transport and Ports entrench its monopoly. The law gives SCTP control of 90 per cent of all maritime freight.

The data on these so-called “illegal” ports is patchy, but given the very long Congo River and its 37-kilometre-long Atlantic coastline, they are likely to be hundreds in operation.

However, some of these “illegal” ports, and in Nigeria oil refineries, are revolutionary attempts by the people to get a slice of national wealth denied them by a corrupt elite in the centre.

Nigeria is Africa’s largest oil producer, but most of its 200 million people only hear about the oil wealth through rumours and stories. This has been the story since it started exporting oil in 1957.


Incompetence and corruption have wrecked state oil refineries, and Nigeria though a big oil producer, imports between 50 and 90 per cent of its fuel needs, depending on the messy state of the Nigerian National Petroleum Corporation.

There are some licensed refineries, but the head spinner is in the illegal bush ones, numbering up to an eye-popping 1,400 by some estimates, who steal crude by sabotaging the pipeline, and doing their thing. Some of these are extremely advanced. Together with the main oil companies, they have polluted land and waters nearly equal to the size of Rwanda with oil.

However, there is a scenario in which legalising them, and getting them to operate to high standards, would be the solution. Nigeria might actually stop importing fuel if it did that.

DRC might consider the same approach. License the illegal ports, bring them into the light, collect your cut in taxes, and you will have improved port capacities and ease of doing business. Everyone goes to the bank happy.

Indeed, a short while back, there was a promising story out of Tanzania. The government said there were well over 400 illegal ports in the country. Four hundred!

In a hopeful, sign, however, it said 150 of them met the criteria for formalisation. It was also reported that there were 58 unregistered airstrips in Tanzania. That was a beauty. The common view of Tanzania is of a law-abiding well-spoken Swahili-speaking land. Seems the subversive and money-wise spirit is alive and well, burning beneath the surface.

In the rest of East Africa, beyond ports, there are thousands of brewers of very strong — and deadly — drinks, who are hunted down, extorted by police and local officials, and fill jails.

Progressives have made the point that decriminalising these breweries, and trading the licences for quality, would save lives, decongest jails and the court system, and put money in regulator’s pockets. One doesn’t need to be high on “chang'aa” or “enguli” to see the case for that.