Somalia strikes back: Disrupting al-Shabab financial empire

[Deeq A.]

Mogadishu (Caasimada Online) – Somalia’s government has recently made significant strides in the fight against the extremist insurgency al-Shabab.

On March 30, Abdirahman Yusuf Al-adala, the Deputy Minister of Information, announced at a press conference in Mogadishu that the government had effectively disrupted al-Shabab’s extortion activities in the country’s ports and airports.

Al-Shabab, an al-Qaida-linked extremist group, has been active in Somalia since 2006. The government launched a concerted military offensive against the group in July 2022, targeting its revenue streams in recent months.

According to a 2022 United Nations report, al-Shabab collects around $120 million annually, primarily through extortion, with about $24 million of its yearly budget used for procuring weapons from abroad.

The group is known for its violence, threats, and mafia-like tactics, often intimidating businesses into paying taxes on real estate transactions and shipping imports.

A challenging task

Aweis Ahmed, a politics and foreign policy professor at Mogadishu University, told The Africa Report magazine that the government’s capability to curb al-Shabab’s funds is limited.

Al-Shabab generates revenue in 10 of Somalia’s 18 administrative regions, despite not maintaining a physical presence in all of them.

A 2022 report from the Hiraal Institute, a Mogadishu-based think tank, estimated that the group collects approximately $15 million monthly, equaling the Somali government’s revenue.

Government efforts and challenges

Somali President Hassan Sheikh Mohamud has committed to enhancing financial sector monitoring and enforcing the 2016 Anti-Laundering and Terrorist Financing Act, which requires financial institutions to report all transactions of $10,000 or more.

He also warned business owners that those found supporting al-Shabab, either willingly or through extortion, would face having their trading licenses revoked.

In January, the government announced it had frozen 250 bank accounts and 70 mobile money-transfer accounts linked to al-Shabab.

Prime Minister Hamza Abdi Barre, speaking at a gathering of Somali diaspora members in Cairo, Egypt, attributed the success to tips from Somali citizens.

Despite these efforts, the well-funded insurgency persists. Al-Shabab continues to find ways around regulations, transferring smaller amounts to avoid having transactions flagged.

Wendy Williams, a researcher at the Africa Center of Strategic Studies (ACSS), reported that Somalis make approximately 155 million mobile money transactions worth about $2.7 billion monthly.

Strengthening investigative agencies

Former Minister for Planning and International Cooperation Abdullahi Godah Barre has called for increased investment in Somalia’s investigative agencies to improve capabilities and capacity.

He also stressed the importance of prosecuting those who enable al-Shabab’s use of banks.

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

As the Somali government seeks to dismantle al-Shabab’s revenue streams, security expert Matt Bryden from the Kenya-based Sahan Foundation think tank emphasized the need for a crackdown on the financial sector and tightening up loopholes.

Though recent government efforts have shown progress, the fight against al-Shabab’s economic prowess remains an uphill battle.

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