Mergers and acquisitions of Africa’s gangs

Posted on July 31, 2016 01:59 pm

As a tween and teen, there was nothing i dreaded like gangs marauding in the hood.Caucasian gangs were more intimidating than black gangs because their tattoos were so visible from a distance and they were more daring than black gangs.Just like then, in the world of illegal markets and organised crime, money is the prime motivator. Legal or not, if someone’s willing to buy, odds are someone else is willing to supply.Thanks to improving internet connection, continued integration of African markets has presented new business opportunities for legal and illegal businesses alike. Not sure how best to distribute your product from Nairobi to Lusaka or from Cairo to Lagos? Don’t worry, let a local retailer take care of that while you focus on wholesale production.There are no more consumers in your domestic market? No matter, start focusing on exports. Even better, let tourism bring the consumers to you.However, there’s just one problem which is expanding your market share can get nasty.In legitimate business, hostile takeovers are a serious threat. In illegal markets, they are a deadly one and at times very catastrophic. While Africa’s organised crime in the 21st century is organised more by the invisible hand than by clandestine gatherings of gangsters that were so prominent during my childhood, there is still big money in mergers and acquisitions.If a rival organisation wants your share of a market, then taking it by force is often one of the only ways to do it. This lesson was learnt the hard way in Australia in the 1990s, when strong gangs took over lesser strong gangs markets by force. In United States, the same was happening and what happened was that once the dust had settled and the bodies were buried, victorious gangs contracted jobs back to the locals while taking a share of the profits.The same is happening in parts of Africa.Effective as this may have been, and important as shows of strength are in establishing a reputation and making credible threats, actual violence can also attract unwanted attention, particularly from law enforcement. Sometimes a peaceful merger may be preferable to armed conquest.But for this to work, each party has to have something the other wants, and a reason to take advantage of a mutually beneficial agreement rather than to take something by force.

Recently, while doing some research on the dark web recently, I came across a proposed merger where a South African drug gang plans to merge with a Mombasa based drug gangs in a bid to expand their business.The most notable thing in the merger was that unlike the 20th century gangs, the two are embracing each other with open arms instead of opening fire on each other with smuggled firearms like it happened in Oz and US as well as Europe in 20th century.The merger has been reported as a move by the South African gangs to spread their foothold across East and Southern Africa countries and at the same time, offering technology and human expertise to the lesser experienced gangs in Mombasa.In Africa’s illegal markets the most fundamental business is protection. Without protection from rivals, traitors in your midst or law enforcement, you can’t operate an illegal enterprise for very long. Because the courts are unlikely to protect any illegal interests or property gangs have, that protection has to be provided through the use of or willingness to use coercive force.Whatever the illegal market, however diversified the production of the good or service, whether you just want to take a cut for protection or get directly involved, there is money to be made controlling the turf on which illegal activity takes place. And because controlling even just a part of such markets requires using or threatening violence, exerting influence over larger transnational markets is easier when there are more of you.The high revenues associated with South African drug markets are well known, and local gangs in Cape Town, Pretoria, Johannesburg, Durban are already said to be heavily involved in or associated with the drug trade, along with smuggling other goods such as illegal firearms.

The South African gangs do not have a history of operating in Kenya or East African region and bringing the Mombasa gangs into the fold will allow them to exert their influence in Kenya and the region, offering a potentially lucrative piece of the action.While some Kenyan-based gangs show signs of expanding outside their country, the Mombasa gangs do not have much of an international presence. The merger with the South African who already have well-established operations in both the South Africa and neighbouring countries offers them this. Given the South African gangs’ prominence, signing up with or patching over to them also promises to boost the reputation of Mombasa gang members.The proposed merger also offers each group the ability to improve their strength and position relative a rival gang. The South African gangs have been fighting with each other since at least the 1980s, and the conflict continues today. In Kenya according to information available on dark web, there have been several high-profile clashes between the home-grown gangs who hail from Kisauni in Mombasa and gangs from other areas of Mombasa town.For a relatively small club like the Mombasa gangs, they are not a club with international chapters, the support of a regional gang such as the South African gangs carries weight and access to resources. For the Johannesburg based gangs, absorbing a club that is allied with them allows them to put more pressure on the other South African gangs that want to compete with them and should the merger with Mombasa gang that is valued at $600,000, they will achieve that without having to deploy their own manpower directly in Mombasa and East African market.While globalisation has brought substantial gains to World’s poorest continent of Africa, it has also presented great opportunities for transnational crime, whether expanding through conquering, colluding or combining with other groups.This latest merger between a Kenyan gang and South African gang may not last forever in illegal markets when power shifts or interests change, alliances break down, but for now it presents real potential benefits for both the gangs, and a real problem for tackling drug gangs related violence and crime in Africa

Contador Harrison