Trevor Royle Diplomatic Editor

MERCHANTS of death come in many different guises in Africa. There is the machete-wielding thug high on drugs and tribal animosity who hacks people to death for no other reason than they are different to him. There is the man-child, old beyond his years, for whom an AK- 47 assault rifle is both a killing machine and a passport to security.

There is the jumpy militiaman at the checkpoint angrily waving an Uz imachine-pistol and demanding dollars. There is the policeman on the make cradling his Browning handgun before concealing it for use later.

There is the mercenary with his rocketpropelled grenade launcher, ready to fire it at any target provided the money is right.

And then there is the granddaddy of them all, the dealer who wears a sharp Savile Row suit, carries a slim briefcase and uses a Blackberry. He wears a familiar-looking tie (no doubt regimental); a signet ring graces his left little finger; he is no stranger to living high on the hog; he knows politicians and senior financiers by their Christian names; he lives in London where the world's most lucrative arms deals are brokered and then factored; and he knows his way about the Middle East and Africa where arms are at a premium. His trade is carried out with the utmost discretion because it involves millions of dollars.

What he does is not illegal but it is all big business. Over the past four years, Britain has sold more than pounds-1 billion worth of arms to Africa, flogging everything from handguns through body armour to armoured vehicles and artillery. Together with sales from the other G8 countries, this amounts to more than 80-per cent of the world's arms export sales to some of the world's poorest and least effective countries.

In 2003 alone, the G8 countries exported arms worth dollars-12bn (pounds-6.6bn) to the developing world, and six of their number - the US, UK, France, Russia, Germany and Italy - lead the world's top 10 arms suppliers. The figures were confirmed last week in a report published by the Control Arms Campaign, which includes Oxfam, Amnesty International and the International Action Network on Small Arms. The figures were produced by the US Congressional Research Service and refer to the period 1996-2003.

In advance of the Gleneagles summit, this is a source of huge embarrassment because, according to the report's findings, all the G8 countries have been implicated in "failing to prevent irresponsible arms transfers".

CANADA: There are no figures available for the period 1996-2003, but in 2003 Canada exported $556 million of conventional weapons, including aircraft, artillery, armoured vehicles and radar systems, to countries involved in armed conflict or human rights abuses. These include Saudi Arabia, the Philippines and Colombia.

FRANCE: Conventional arms sales worth $3.2bn. This includes small arms ammunition and light weapons to Burma and Sudan, and tear gas to Kenya. The French government is also criticised for a lack of transparency in weapons sales, and the report found a loophole which allowed the sale of "leg-irons, thumb-cuffs, and electric shock stun weapons which can easily be used as a means of torture and ill treatment".

GERMANY: Sales worth $1.8bn. Although the country has tough export regulations for arms sales, many German components are used in weapons systems "that could easily be used to facilitate human rights violations or contribute to conflict of internal repression". This includes components for military vehicles in Burma.

ITALY: Sales worth $2.7bn to customers including Algeria, Colombia, Eritrea, Indonesia, Israel, Kazakhstan, Nigeria, Pakistan and Sierra Leone. A loophole in Italian law permits the unhindered export of "nonmilitary" weapons, including sporting rifles, pistols and shotguns. The police in Brazil report that the most frequently confiscated sidearm is the Italian-made Beretta, which accounts for 8% of the world's gun fatalities.

JAPAN: According to its government, Japan "does not export any arms whatsoever" but, like Italy, it produces and exports nonmilitary weapons. Among the recipients are the Philippines. In 2001, Japan exported small arms worth $70.3m.

RUSSIA: Sales worth $2.62bn. Customers include Algeria, Ethiopia and Uganda. Russia has also been in discussions with Burma, Nigeria and North Korea over upgrading existing military supplies. Other important markets include Sudan and Yemen, both of which have "long-standing and acute human rights problems".

UK: Sales worth $4.3bn. The government claims to have "one of the strictest and most transparent arms export licensing systems of any country", and new controls next year will limit international arms brokering activity.

However, there are breaches in the code, caused by "open licences", which make it possible for exporting companies to make multiple exports without the need for further scrutiny. Moral anomalies include the sale of 42 BAe Hawk strike aircraft to India in 2002 at the very time that Tony Blair was trying to avert a war between India and Pakistan.

US: The world's leading arms supplier with sales of $151.9bn. Although US law forbids the export of arms to countries involved in the gross violation of human rights, recent customers have included Colombia, Israel, Nigeria, the Philippines, Saudi Arabia and Sri Lanka, and in
2003 the US lifted its ban on military assistance to Rwanda. Four US companies are the world's leading arms manufacturers: Lockheed Martin, Boeing, Northrop Grumman and Raytheon. All this comes at a price that is usually born by those countries which can least afford to spend lavish sums of money on arms. According to the report, 20-per cent of the debts owed by the world's impoverished countries, mostly African, come from past arms sales from G8 countries. However, it is a win-win situation for the firms doing the deals. All the G8 countries operate some form of export credit system - in the UK the Export Credit Guarantee Department underwrites arms sales and pursues defaulters. The result is overarching misery because many of the countries suffer from chronic poverty and disease, and their populations struggle to survive on a dollar a day per person.

"Each year hundreds of thousands of people are killed, tortured, raped and displaced through the misuse of arms, " says Irene Khan, secretary-general of Amnesty International. "How can G8 commitments to end poverty and injustice be taken seriously if some of the very governments are undermining peace and stability by deliberately approving arms transfers to repressive regimes, regions of extreme conflict or countries that can ill afford them?" To its credit, the UK government consults the Department for International Development before issuing arms licences, but this has not prevented arms sales to countries, such as Saudi Arabia and Colombia, which have dubious human rights records. Neither does it do anything to stop the illegitimate sale of arms, a market which only exists because of the worldwide proliferation of weapons and the impossibility of bringing illegal arms sales under control. In this curious netherworld, arms deals can be worth anything up to dollars-100m, and for the international arms dealer - or "consultant", as he styles himself these days - the rewards can be worth the effort.

First, he gets his shopping list from the appropriate minister in the country seeking new weapons. Then he talks to various arms manufacturers and haggles a price, usually by asking for a percentage if he is appointed sole agent. Once everything is in place, he factors the contract, getting the necessary licences from the government of the supplying country and finally bribing officials in the client country to make sure that there are no last- minute hitches. Everyone gets a slice of the action but the country purchasing the weapons suddenly finds that it is one day older and deeper in debt. Even a dollars-50m deal can ratchet up enormous repayment rates which quickly become unsustainable.

And because this below-the-counter trade is beyond regulation, it is difficult to stop.

Most weapons start off as legal devices and are sold as such - governments need to equip their security forces and there is a legitimate need for small arms sales of this kind. The trouble comes when the weapons are moved on, to be sold on the open market to the highest bidder, either legally or illegally. At the last count, there were 1250 small-arms manufacturers operating in 90 countries.

With sales amounting to dollars-4bn a year, the industry attracts unscrupulous dealers who are impossible to regulate.

"Brokers carry out a wide range of activities that are instrumental in diverting weapons from legal to illegal markets, such as arranging a contact between a shady customer and an unscrupulous supplier, providing finance and transport, " says Pasi Patokallio, chair of the UN's 2005 Biennial Meeting of States on Small Arms, who last week called for the eradication of illegal small-arms sales at next month's G8 summit. "As of now, brokers can act almost entirely without oversight in much of the world. Controls on legal and illicit brokering are strongly linked: unless states regulate the first they are unable to effectively prevent the second."

Carried out in the shadows, or openly and legitimately in the corridors of power, the arms trade has every reason to be a central issue at the G8 summit. The leaders sitting down to discuss world poverty have announced their intention to introduce economic models and adopt policies which address poverty reduction, but at the same time five of their number are responsible for producing 89-per cent of the world's arms transfers.

And there is a link. All the G8 countries give tax breaks to arms manufacturers and fund research and development - at the same time, these countries provide money for aid to developing countries and have wiped out the debts of 18 countries under the Highly Indebted Poor Countries initiative.

According to the Control Arms Campaign, the G8 summit will fail in its duty if its members do not "clean up their act by enforcing existing laws prohibiting the export of weapons to states that violate human rights and international humanitarian law". What this means is a new global arms treaty which forces all countries to abide by the same rules and standards. This is what the African Union wants. The Control Arms Campaign has produced undeniable evidence that the problem needs to be solved, and Foreign Secretary Jack Straw has given backing to the concept, but even before the summit begins the G8 foreign ministers have failed to reach agreement on dealing with the arms trade. It is hard to see the Gleneagles summit reacting positively when the organisation itself is such a major part of the problem.