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Al-Shabaab revenue "improves" amid onslaught by SNA and AU forces

By Staff reporter , Garowe Online

MOGADISHU, Somalia - Somalia-based Al-Shabaab militants have drastically improved their revenue collection at the expense of the Federal Government of Somalia, Hiraal Institute said in a report that covered the group's financial exploits which could raise issues on the group's ability to wage attacks in the country.

The militants collect at least $15m [£11m] a month, with more than half the amount coming from the capital, Mogadishu, the Hiraal Institute said, adding that Al-Shabaab seems to have improved its systems since 2018, in yet another worrying trend.

"The group’s capability in tax collection has improved, and complaints about the group’s reach have been growing ever since," Hiraal said in the latest report. "This study was therefore done in order to understand how the group has been faring since then, what the government’s reactions have accomplished, and what can be done in order to curb the group’s financial operations."

The Institute interviewed businessmen, government employees, and those representing NGOs in Mogadishu from June to October 2020. Also, the research was extended to other parts of the country, with the result also being also similar.

Al-Shabaab still controls large swathes of rural central and southern Somalia, and they have been wrestling against the Somali National Army and the AU forces. To further understand the group's modus operandi, the Al-Shabaab militants, especially those at the higher ranks were contacted by Hiraal officials.

"Al-Shabab officials were contacted in order to understand the process from the group’s perspective. We considered these as sufficient to give us the general picture of the AS tax collection across Somalia," Hiraal said in an executive summary.

"The interviews were conducted in person; only the interviews with AS were conducted by telephone. Information that is best suited for the eyes of policymakers is included in a separate, more elaborate, document."

AS taxes all major companies; these taxes are in the form of annual Zakah and monthly payments. Clans and businesses in Al-Shabaab areas are also made to pay Infaaq when the local AS government is short in cash, added the Institute.

The report comes at the time the federal government of Somalia is struggling to stamp authority especially on improving her financial ability. For the past year, the FGS has managed to apply successfully for tax relief, something which improved the country's financial gains.

Hiraal Institute also believes that the improved systems by Al-Shabaab have enabled the group to run terror activities in Somalia. However, despite the good fortunes, the group hasn't increased attacks or salary of the fighters, something that points at a disagreement among top leaders which was highlighted recently.

"The group has substantial money reserves, making it the only Somali polity that has achieved this impressive feat. While tax collection increases yearly, salaries have not changed, and military operations by the group have not increased," read the report.

"This means that, by all measures, the group is running a major financial surplus. The version of this paper edited for policymakers will shed light on where the surplus money is going."


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