Ending Al-Shabab’s Funding a Major Challenge, say Somali Experts

Speaking via a messaging application, he says al-Shabab has a sophisticated system of tax collection while government oversight of banking and Islamic money transfers, called hawala, is poor.

News Keydmedia Online
9 July 2022

MOGADISHU, Somalia —  Somalia's new president Hassan Sheikh Mohamud has vowed to shut down revenue streams for al-Shabab terrorists. The Islamist militants are believed to make millions of dollars per year from taxes they impose in areas of Somalia under their control. But security analysts say cutting off the terrorist funding won’t be easy.

Somalia’s President Hassan Sheikh Mohamud this week said his government will crack down on funding streams for the al-Shabab militant group.

Speaking Tuesday to Somali troops training in Turkey, Mohamud accused the Somali group of using extorted taxes to help finance terrorism across Africa and the world.

His remarks were carried on Somali National Television.

Mohamud says they have evidence that the money collected by al-Shabab is used in financing terror groups in Mozambique and Nigeria, with some going to al-Qaida terrorists.

The Somali president did not elaborate on the evidence, which the militant group dismissed in a Thursday press release as “baseless accusations.”

Mohamud’s comments were the first by Somalia’s government to acknowledge that al-Shabab earns money through extortion.

The U.N. Panel of Experts report on Somalia earlier this year said al-Shabab has about 100 checkpoints throughout the country where they impose taxes on trucks transporting goods.

The Mogadishu-based Hiraal Institute think tank estimates al-Shabab earns enough to spend $24 million per year on weapons.

Security experts say a crackdown on terrorism funding would mark a departure from Somalia’s previous government, which focused more on fighting political battles, but it won’t be easy.

Matt Bryden is a security expert and strategic advisor at Britain and Kenya-based Sahan Foundation think tank.

Speaking via a messaging application, he says al-Shabab has a sophisticated system of tax collection while government oversight of banking and Islamic money transfers, called hawala, is poor.

"The group also is able to move its funds around Somalia to conduct transactions and transfers partly because of the very weak regulatory framework in Somalia," Bryden said. "The banking system, the money transfer system, or ‘hawalas,’ are still very poorly overseen by the government. Al-Shabab has exploited these weaknesses to the maximum. And so, a government crackdown on the financial sector and tightening up the loopholes is also going to be key to combating al-Shabab and drying up its resource base."

Bryden says Mohamud, who was elected in May, is already taking security steps against the Islamist militants.

Somalia’s Danab special forces have been back in action against al-Shabab in several areas of the country.

Abdurahman Sheikh Azhari is the director of the Mogadishu-based Centre for Analysis and Strategic Studies (CASS).

He says multiple fronts are needed to defeat al-Shabab, including military operations, fighting against their finances, and fighting against their ideology.

The al-Qaida-affiliated militants have been fighting against Somalia’s Western-backed government and African Union peacekeeping troops since 2007 to impose strict Islamic law.

The U.S. announced in mid-May that it would re-establish a military presence in Somalia to help fight the militants after pulling out troops in 2020.