New York (Caasimada Online) – Al-Shabab, a notorious Somalia-based Al-Qaeda affiliate, may have increased its revenue base despite spirited campaigns targeting its sources of finance, a new UN report suggests.
The report indicates that the group can raise $150 million annually, which caters to the payment of salaries, the purchase of new weapons, and other essentials fundamental to the group’s operations.
This article delves into how Al-Shabab generates such a significant amount and how the Somali government is responding to the group’s financing.
Revenue collection methods and sources
Al-Shabab collects revenues from civilians in various towns under its control mainly through threats and intimidation. Those who fail to comply with the group’s demands risk being punished.
However, the government has warned business owners against funding Al-Shabab through forceful means or willingly, with offenders risking having their permits canceled. Despite this, the group has continued to generate massive amounts of money to finance its operations.
The report notes that Al-Shabab’s fortunes doubled from $100 million in the previous year, which has enabled the group to increase its military hardware purchases by 25%.
The group diverts millions of dollars for purchasing weapons mainly from war-torn Yemen, which has been linked to instability in the country. Additionally, Al-Shabab generates revenue from:
1- Taxation: The group taxes businesses, especially those in the agricultural sector, as a means of financing its operations. The group also taxes local residents, transporters, and local markets.
2- Charitable donations: The group solicits contributions from individuals and organizations, claiming that the funds will go towards humanitarian efforts.
3- Ransoms: Al-Shabab has been known to abduct foreigners and demand ransom payments in return for their release.
Efforts to cut off funding
The Somali government has made significant efforts to cut off funding for Al-Shabab. In December 2022, the government confirmed the closure of 250 banks and 70 mobile money transfer accounts linked to funding Al-Shabab activities.
The group responded by accusing Mogadishu of interfering with businesses critical to service delivery.
This week, President Hassan Sheikh Mohamud’s administration limited the amount of money transacted by mobile money firms to just $300 daily to contain the funds wired to Al-Shabab. The president said this would improve accountability.
Al-Shabab’s response
Despite the strong military campaign against Al-Shabab in Somalia, the group has responded with some of its largest and most lethal attacks.
The group has recruited fighters responsible for attacks targeting innocent civilians, government officials, and the military. The UN report notes that the group’s fighting force remains steady, estimated at 7,000-12,000 fighters.
Conclusion
Al-Shabab continues to generate significant revenue despite the Somali government’s efforts to cut off its funding sources. The group has diversified its sources of financing, making it difficult to track and stop its operations.
However, with the sustained operations against Al-Shabab and the government’s efforts to limit the group’s revenue sources, there is hope that the group’s activities will be curtailed soon.
