What's the impact of illicit trade on East African economies?

East Africa, a crucial player in the fight against terrorism and a key driver of economic progress in Africa, is facing a significant threat from illicit trade. A recent report titled 'An Unholy Alliance: Links Between Extremism and Illicit Trade in East Africa' from the Counter Extremism Project highlights the detrimental impact of illicit trade on the region's economies. In an exclusive interview with CNBC Africa, Sir Ivor Roberts, the author of the report, delved into the complexities of the situation. The report reveals that East African economies are grappling with a combination of challenges stemming from illicit trade, extremism, corruption, and organized crime. Globally, illicit trade accounts for approximately 3% of the world's Gross National Product (GNP), equivalent to a staggering $2.2 trillion. Although East Africa's share of illicit trade is a fraction of the global figures, it is still substantial and hindering the region's development post-pandemic. The need for funds in the hands of central and regional governments is crucial for rebuilding the economy, creating jobs, and providing infrastructure for the burgeoning young population in East Africa. Extremist groups such as ISIS, the Lord's Resistance Army, pirates in Somalia, and Al-Shabaab are heavily involved in various sectors of illicit trade, further exacerbating the region's challenges. Recent incidents in northern Mozambique, where an ISIS affiliate attacked a major gas company, resulting in significant economic repercussions, emphasize the gravity of the situation. Illicit trade not only serves as a transit route for criminal activities but also fuels homegrown problems within the region, necessitating strong regional cooperation to combat these threats. The financial toll of illicit trade in East Africa is substantial, with estimates suggesting that the illegal wildlife trade alone amounts to approximately $23 billion, a significant portion of which originates from the region. Moreover, Kenya loses an estimated $900 million to counterfeiting annually, underscoring the scale of the issue within the country. Illicit trade disrupts the legal economy, siphoning funds away from lawful activities and impeding governments' ability to generate employment and enhance infrastructure. The repercussions of illicit trade extend far beyond financial losses, impacting the overall stability and advancement of East African economies. While eliminating illicit trade entirely may be a daunting task, concerted efforts by regional governments and international support are crucial in curbing its prevalence. Challenges such as illegal cigarette consumption, wildlife trafficking, and smuggling of commodities like charcoal and sugar underscore the multifaceted nature of illicit trade in the region. The need for tighter controls and enhanced collaboration to combat these illicit activities is imperative to safeguard the economic viability and security of East African nations.