Al-Shabaab revenue reduces as Somalia implements stringent regulations


MOGADISHU, Somalia - The Somalia-based Al-Shabaab militants could struggle to sustain their operations in the near future, the government has said in a statement, while taking to account the group's dwindling fortunes on revenue collection, in the middle of stringent regulations imposed on money transfer and banks in the country.

The statement issued on Thursday claimed the group's revenue was reduced by half in as many months, crediting the progress on shutting down the suspected bank and mobile money accounts, and targeting militant taxation officials, the government said without specifying the amount of money in question.

Al-Shabaab depends on money raised from the extortion of local businesses and individuals, collections of fees on goods, as well as the facilitation of illicit trades, according to the US Treasury. There have been deliberate attempts to suffocate the group's revenue flow as a strategy to counter them and eventually eliminate them.

This is the first time the government has announced an alleged revenue fall within Al-Shabaab in the middle of sustained military operations targeting the group on all fronts. President Hassan Sheikh Mohamud had also bet on revenue streams and ideological tactics apart from military combats to eliminate the militants.

Three months ago, Hassan Sheikh Mohamud announced that over 70 mobile money transfer firms and 250 bank accounts linked to Al-Shabaab activities were closed down, marking the beginning of the crackdown on the financial sector. The group makes up to $120 million annually according to the most recent report by the United Nations, up from $100 million.

According to the UN, over $24 million is diverted to purchasing of sophisticated weapons from abroad especially in Yemen, another war-torn country in the Middle East. The weapons help the group to effectively face the national army and foreign troops who have been fighting for decades to liberate several parts of the country.

To further block revenue collection, Hassan Sheikh maintains that business owners found culpable of remitting taxes to Al-Shabaab will have their trading licenses revoked, another strategy to control financial flow. In a statement published by the group's allied media houses, Al-Shabaab claimed it finances violent extremists outside Somalia, noting their contributions in Mozambique and Nigeria.

Research done by the Africa Center of Strategic Studies recognized the fact that the UN Office on Drugs and Crime has provided the government of Somalia with technical support on disrupting al Shabaab’s financing sources, methods of storage and transfer, and illegal taxation systems.

However, the federal government has been slow to curb al-Shabaab’s exploitation of the financial system beyond targeting al-Shabaab financial officers and “taxation” checkpoints via conventional military operations, the report notes, while acknowledging several positives in curbing illegal taxation.

For years, Al-Shabaab has shown effectiveness and efficiency in the collection of revenue, at times more than the federal government, further stabilizing the empire. The lack of proper identification, coordination, regulatory, enforcement, and political will continues to give the militants a loophole to extort money from locals.

For the government to effectively block revenue collection by the militants, the Think Tank says, Somalia should prioritize the professionalization of the government’s infiltrated agencies, particularly the entities responsible for financial, intelligence, and judicial functions, which are at the forefront of shutting down al Shabaab’s financing and money laundering.

For this to happen, it adds, the country requires more than just financial sector development but also better criminal investigatory work, improved law enforcement, and a change in culture within the federal government and federal member states toward transparency, accountability, and citizen service delivery.

The United States has also been on the frontline in assisting Somalia to block Al-Shabaab's revenue sources through the introduction of monetary rewards to individuals who will help in the identification of illegal taxation points by Al-Shabaab and other channels used by the group. The money collected is also used in paying fighters.

According to the US Africa Command, Al-Shabaab has between 5,000-7,000 active fighters, multinational but earlier this month, the Somali government said over 3,000 militants were killed in the first phase of the military campaign, an indication that membership could be more than estimated. Religious scholars are helping in curbing recruitment at local levels.


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