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BLACK GOLD: The charcoal grey market in Kenya, Uganda and South Sudan

Executive Summery

Charcoal is one of the most important commodities in sub-Saharan Africa, with as much as 80% of the urban population in the East Africa region using charcoal as their primary energy needs for cooking. It is cheap, efficient and easily transportable. It also provides income and livelihoods for millions of people. In Kenya, for example, the charcoal industry employed approximately 700 000 people in 2018, who in turn supported between 2.3 million and 2.5 million dependants. But for the majority of those who rely upon charcoal as a fuel, alternatives are often more expensive or less accessible. In East Africa, where urban populations are growing rapidly (see Figure 1), investment in other forms of energy (such as electrification) is not matching current needs, with inadequate infrastructure, limited ability to transmit electricity over long distances, and limited generation capacity.This created an ‘energy gap’ that is currently filled by wood fuels, among which charcoal is a common option.

Rates of electrification, wood fuel use and access to clean cooking.
NOTE: Electrification has increased in all countries in focus in recent years, but charcoal remains a favoured source of fuel for cooking. Access to clean cooking remains very low, and rudimentary charcoal stoves and other such equipment are routinely used.
SOURCES: The Energy Progress Report, Uganda 2016 National Charcoal Survey, Charcoal value chains in Kenya: a 20-year synthesis

The dependence on charcoal comes at both an environmental and public health cost. Charcoal conversion is a contributor forest cover loss threatening biodiversity and, in turn, the environment that sustains rural populations, as well as posing a health risk due to rudimentary burning techniques and the use of inefficient charcoal stoves. A 2018 report on the state of East Africa’s forests noted Tanzanian deforestation rates are among the highest globally: if they continue or increase, all forest will be lost within 50–80 years. Elsewhere, Uganda lost almost half its forest cover between 1990 and 2015. In short, the charcoal value chain ties the continent’s carbon sinks, biodiversity hotspots and watersheds to the fate of the rural poor and the quality of life of millions of urban residents.

The role of the state in such instances is to regulate the trade and balance these interests, but in East Africa – the focus of this study – the legal frameworks around charcoal production and trade are patchy. Kenya currently has a total trade ban on the production and sale of Kenyan charcoal, which has been in place across the whole country since 2018. In Uganda, certain districts have passed by-laws which attempt to stop all charcoal production. In South Sudan, a ministerial decree banned the export of charcoal in 2015, but this decree was only enforced in 2018. Other countries in the region have also sporadically instituted bans, often following outcry from communities in rural areas or advocacy groups against rapid rates of forest degradation or deforestation linked to charcoal production.

But while the production and sale of charcoal may have been prohibited in some places, demand for charcoal remains high. This situation has led to the emergence of a ‘grey market’ in charcoal, where laws or regulations are flouted at some point in the value chain, but where the final sale is not strictly illegal. (The absence of absolute prohibition on all stages of the value chain is why we talk about ‘grey’ rather than ‘black’ charcoal markets.) In addition, the charcoal trade is largely perceived as socially acceptable as it concerns a vital basic commodity, even if some aspects of the value chain may be unlawful.

But despite such acceptance, there are real consequences to the grey market trade in charcoal, ranging from corruption and cartelization to violence and intimidation, not to mention the unchecked exploitation of valuable forest resources and health risks that dirty fuels pose. Criminality affects each stage of the value chain in charcoal, although the nature and extent of that criminality differs from country to country.

This report explores how such criminality manifests in the charcoal value chains in Kenya, Uganda and South Sudan, and how the three are linked by the regional flows of charcoal. It finds that while there is no massive or acute organized crime problem, poor, ineffective or inappropriate regulation has given rise to forms of market organization with organized crime qualities – including cartels, high-level corruption and violence – in some locations. This has undermined law enforcement capacity, jeopardized environmental protection efforts and expanded the exploitation and coercion of vulnerable populations, not least those for whom charcoal is a convenient fuel.

This report is premised on the belief that an in-depth understanding of the value chains across the region is crucial to improving regulation; by understanding where power and criminal risk is concentrated, we can help locate where intervention will be most effective. Given the current rates of urban growth in Africa, as well as trends in forest cover loss (which have global implications for climate change), such action is much needed.

Grey market charcoal: corruption and criminality risks

The charcoal trade has been framed in numerous different ways: as a mundane commodity, a labour and poverty issue, an energy security issue, an environmental threat and, in recent years, as a conflict finance issue, given al-Shabaab’s role taxing the charcoal trade in Somalia.11 It is relevant to ask what value framing it as an organized crime problem adds to our understanding of the issue. Our answer to this is that we set out, first and foremost, to analyze an illicit market, and then to understand at what points, if any, criminal organization, concentrated criminal profits and the symptoms of organized crime activity occur. This analysis, as the report goes on to explain, does not reveal a large or acute organized crime problem, but rather a grey market in which poor, ineffective or inappropriate regulation gives rise to forms of market organization that display organized crime qualities in some locations, such as cartels, high-level corruption and violence.

Charcoal local Market

This study draws on three key analytic frames drawn from the criminological literature and the Global Initiative Against Transnational Organized Crime’s (GI-TOC) work over the last decade: ‘flows’, ‘harms’ and the particular problems arising from ‘grey markets’.

Flows describe the physical movement of goods across physical territories, but they are also an analytical framework that allows us to capture the differential impact of national legislation, governance and enforcement on commodities that are smuggled across borders. This study is structured around understanding the flow of charcoal from production to consumption sites, drawing both on qualitative and pricing information.

The GI-TOC’s work analyzing contraband markets has highlighted three key characteristics of illicit flows: „

  • Not all components or activities in the flow may be illegal – and indeed the product or activity may not be illegal in all countries. This presents opportunities and challenges for an effective response. „
  • Many illicit flows have parallel systems of legal flows (such as people, minerals or timber). In these flows, laundering becomes a key focus of criminal activities, so that illegal goods can ultimately be disguised in legal markets.
  • Due to their transnational nature, tackling illicit flows requires international cooperation and, even more importantly, some form of international consensus on how to respond. This consensus-building process should include defining what is legal and what is illegal – and harmonizing this definition across legislation.

Read the Full Report: BLACK GOLD: The charcoal grey market in Kenya, Uganda and South Sudan


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