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Off-Budget Expenditure

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Off budget funding has become the principal means through which arms are procured in many states, with the secrecy and shadowy nature of arms trading creating ample opportunities for corruption. One unintended consequence of donor states’ attempts to control ‘excessive’ military expenditure by setting military expenditure caps has been for aid receiving governments to push aspects of military spending off-budget. A variety of off-budget mechanisms have evolved, including the following:

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Asset transfers

The redistribution of existing assets to the benefit of the armed forces, which may involve the reallocation of resources from other budgetary headings or state revenues. Examples include the Ugandan government’s initial allocation of resources to the police budget, later redirected to the military, to augment the costs of the campaign against the Lords Resistance Army in the north of Uganda (Omitoogan 2003). During the border war between Eritrea and Ethiopia over 1998-2000, Ethiopia diverted the proceeds of the privatisation of state companies to fund its war effort, in particular the $300m purchase of Sukoi 27s from the Russians                   (Renton et al. 2007).

Natural resource predation

The pillage of natural resources such as diamonds, copper and coltan, oil, and timber and the use of resource revenues for arms procurement and the personal gain of warlords and generals alike is well documented in the DRC, Liberia, Sierra Leone and Angola (Renton et al 2007, Global Witness, UN Security Council 2003). In Nigeria the notoriously corrupt cash-call system that operated in the state owned oil industry is thought to have funded Nigeria’s role in the Economic Commission of West African States Monitoring Group (ECOMOG) operations in Liberia and Sierra Leone between 1990 and 1999.  The figures for these ‘peace’ operations did not appear in Nigeria’s defence accounts, but are thought to have cost an estimated $12bn (Adekanye 1999). In Angola it has been estimated that as much as a billion dollars a year of state oil revenues have been siphoned off into shell companies for use in a tangled web of corruption and back room arms deals (Global Witness 2004). In the DRC US $80m were appropriated from the state owned diamond mining company (MIBA), of which $20 m is thought to have been used to buy weapons from Ukrainian and Czech arms suppliers (Africa Confidential June 2004).  

Taxes and levies

Soldiers and rebel groups often augment their wages and raise money for weapons through the imposition of informal taxes and levies and other illegal activities.  Warlords in Somalia organized ‘tax zones’ to raise resources to prosecute their clan wars. In Burundi soldiers augment their wages by imposing taxes on farmers’ crops and levies on border trade (Nimubona et al. 2007). Soldiers employ road-blocks all over Africa to extract payments to embellish their paltry wages.

Illegal trade

In the Niger Delta, officers in the Joint Task Force are reportedly involved in the criminal gangs who are engaged in the illegal bunkering of oil (Africa Confidential 2007). Some 30,000 – 100,000 barrels of oil were stolen each day; the revenue from oil is thought to buy arms for the militias (Africa Confidential, 2005) West Africa has become a major exporter of cocaine. It is not produced in the region, but the networks between Colombia and Venezuelan drug barons and their West African business partners, which include senior military officers and government officials, have established complex and lucrative transshipment operations along the West African seaboard. The President and senior military officers in Guinea Bissau are thought to be at the center of the cocaine trade in West Africa (Africa Confidential 2007).

Diversion of humanitarian assistance and aid

Relief for the victims of armed conflict has opened further opportunities for corruption within the military.  In southern Sudan, ‘redeeming,’ a campaign that raised millions of dollars in charity in the United States and other developed countries in order to buy back and free slaves, was rife with corruption. Commanders of the Sudan People’s Liberation Army reportedly pocketed much of the money paid to buy captives’ freedom, and in some cases passed off free men and women as slaves in order to keep the payments coming. Ethiopia is thought to have diverted humanitarian aid to procure weapons in the build up to its border war with Eritrea.

External military assistance

External powers are often implicated in supplying arms, or other forms of military assistance to neighbouring states involved in conflict. For example in the civil war in the Republic of Congo 1993-2002 Angola and Chad provided military assistance to President Sasson. In the DRC Laurent Kabila received military assistance in the form of arms, training and supplies by neighbouring states Zimbabwe, Angola, Namibia and in the early days Rwanda and Uganda. More recently in 2007 there have been reports of arms being supplied to government forces on the one hand and militias on the other in Somalia in violation of the UN arms embargo. These arms transfer, appear to be motivated by the ideologies of the ‘war on terror’.  

Diaspora contributions

Funds raised from diasporas are another means of augmenting ‘off-budgetary’ resources. Eritrea was reported to have raised $400 million for its war effort, in donations from the Eritrean diaspora (The Economist 1999). Parts of these funds are thought to have been used to purchase MiG 29s from the Ukrainians.

Peacekeeping Funds

Volunteering soldiers for UN or African Union peacekeeping operations (PKOs) is another means of generating extra funds. Ethiopia, Ghana, Nigeria, Kenya, Mozambique, Namibia, Senegal, South Africa, Uganda and Zimbabwe are among those countries that have volunteered for PKOs. Rarely do UN payments for these forces appear in annual military budgets. The failure to declare payments offers opportunities for corruption.  In certain cases corrupt military officers have banked soldiers pay (Hutchful). During Nigeria’s involvement in ECOMOG missions in West Africa generals benefited from revenues written off as expenses (Adebayo 2002).  Millions of dollars were diverted into private bank accounts under this ruse.

Prolonged Conflict

Many conflicts in Africa are purposefully prolonged by the military and rebels alike, because the conditions of instability enable warlords and generals to rob their nations of resources and funds. At the same time, plundered resources provide the income with which militias and the armed forces are able to purchase arms so that they can continue violence.