Can Somalia block Al-Shabaab's revenue sources?

Al-Shabaab has been battling to overthrow UN-backed Somali government since 2008 [Photo: GETTY IMAGES]

MOGADISHU, Somalia - For over 16 years, the Al-Qaeda-linked group; Al-Shabaab, has managed to run its operations smoothly due to sophisticated ways of collecting revenue which helps in purchasing weapons and payment of fighters, making it extremely difficult to contain the rowdy militants.

Recently, President Hassan Sheikh Mohamud warned business owners against remitting taxes to Al-Shabaab, noting that those found culpable will have their licenses canceled. The president also closed down over 70 mobile money transfer firms and 250 bank accounts linked to Al-Shabaab.

A report by the United Nations revealed that Al-Shabaab can collect up to $120 million annually up from $100 million even with the Somali government insisting that the revenue has been reduced. Of this amount, $24 million is used in purchasing weapons which the group uses to create mayhem in the country.

Abdirahman Yusuf Al-adala, Somalia's Deputy Information Minister recently said the country has made tremendous progress in curbing Al-Shabaab activities, including their sources of revenue. The country had recently completed the first phase of an operation against the group, killing over 3000 militants.

“The extortion that al-Shabaab used to collect from Somali citizens from the ports and airports has been terminated,” he said at a news conference in the capital, Mogadishu, on March 30." “Fifteen vehicles used by al-Shabaab to collect funds were seized, and 20 leaders who were in charge of collecting funds were killed.”

Aweis Ahmed, a lecturer of Politics and Foreign Policy at Mogadishu University, believes that the government will struggle to eliminate the militants, citing their deep networks across the central and southern regions where the government has been tackling them in the last seven months.

“The capability of the [government] to curb al-Shabaab funds is limited,” he told The Africa Report magazine.

Most of the money is obtained through extortion, including taxing local businesses and individuals, facilitating illicit trade, and collecting fees on goods at checkpoints and ports. Recently, the group claimed that it sponsors other terror groups across the country.

A 2022 report from the Hiraal Institute, a Mogadishu-based think tank, estimated that al-Shabaab collects $15 million a month — as much revenue as the Somali government accrues. The intelligence arm of Al-Shabaab; the Amniyat, collects revenue on behalf of the group through remittances in form of Zakat.

Matt Bryden, a security expert and strategic advisor at the Kenya-based Sahan Foundation think tank, said the Somali government must shore up financial regulations that al-Shabaab exploits through banks and money transfers known as “hawalas.”

“A government crackdown on the financial sector and tightening up the loopholes is also going to be key to combating al-Shabaab and drying up its resource base.”

Hamza Abdi Barre, the Prime Minister of Somalia, expressed confidence that the government will eventually eliminate the group, citing the closure of the 70 mobile money transfer firms and 250 bank accounts as a major milestone towards completely locking the group out of finances.

“This was a major victory and was only possible because of the tips of the Somali citizens,” he said during a January 11 gathering of Somali diaspora members in Cairo, Egypt. “We are in the process of investigating the amount of the frozen money in the closed accounts. We can’t sit back and allow them [al-Shabaab] to wreck our future for selfish gains.”

Most al-Shabaab transactions are made with cash and mobile money transfers. Every month, Somalis make an estimated 155 million mobile money transactions worth about $2.7 billion, ACSS researcher Wendy Williams wrote in a March 27 article.

Abdullahi Godah Barre, the former Minister for Planning and International Cooperation called for Somalia to invest in its investigating agencies to improve capabilities and capacity. He also recommends the prosecution of rogue bankers allowing the group to channel money through them.

“The employees of the banks must be held accountable,” he told Voice of America. “Those who are proxies, whose names are used to open accounts, should be prosecuted and face justice.

The US Africa Command estimates that there are close to 8,000 active Al-Shabaab fighters but the number may have reduced significantly due to a recent crackdown which left thousands of them dead.

The Somali National Army, the US Africa Command, the African Union Transition Mission in Somalia [ATMIS] am local militia are cooperating in the Al-Shabaab war.

GAROWE ONLINE