Al-Shabaab the official al -Qaeda affiliate in East Africa and headquartered in Somalia has created a name for itself as a terror organization that has sought to topple the Western-backed government replacing it with one based on Sharia law. In the group’s quest to implement their agenda, they have attracted numerous domestic and even global sympathizers that have both, directly and indirectly, bankrolled the group’s activities. The group has been able to establish an intricate financial system that they have used to accrue as well as move the funds they get from their different sources dodging and or working around formal huddles that discourage terror funding.
The financial system used by the al Shabaab has been quoted to involve a wide variety of actors both internal and external financiers that have been bankrolling the terror organization’s activities either directly or indirectly. Notably, the source of al Shabaab’s financing draws from a wide pool including state sponsors, mosques, diaspora, charities, piracy, contraband business and zakat and extortion in Somalia.
Sources Of Al Shabaab’s Funding And Financial Resources
- Charities and donations from Mosques in the Somali diaspora– there is a clear financial trail that indicates that mosques and charities founded and or run by clerics who sympathize with al Shabaab especially from Europe, Canada, America and neighboring Kenya have made some of the highest remittances to al Shabaab. Notable examples include Pumwani Riyadya Mosque Committee (PRMC) in Nairobi, Al-Fourqaan mosque and a subsidiary charity called Al-Waqf-al-Islami Foundation in the Netherlands with links to Saudi Arabia among others.
- State sponsorships– it is a known fact that countries like Eritrea have supported al Shabaab by sending money, weapons as well as troops to fight the transitional government in Somalia alongside. Additionally, countries like Yemen, Iran, Syria, and Qatar have been linked with funding the al Shabaab on different capacities ranging from funds and weapons with the most recent case being a Qatari national arrested and suitcases of money recovered believed to be headed to the al Shabaab.
- Family and friends in the diaspora– Somalia has a large number of its resident living abroad as refugees and as immigrants and who send over $500 million back home to friends and family. Some of the monies eventually reach the al Shabaab and contribute quite a sizeable chunk of the al Shabaab’s source of funds.
- Taxation, extortion and Zakat collection in Somalia– al Shabaab is infamous or demanding bribes masked as protection from aid organizations, business and other entities operating in areas controlled by the al Shabaab. The monies are extorted from people and comprise a huge amount of funds collected by the terrorists. additionally, the al Shabaab has an elaborate zakat collection system among most parts of Somalia.
- Kismayo port, piracy, sugar, and charcoal business– al Shabaab has been majorly in control of some key port towns and city that they have used as an avenue to run their illegal trade especially of charcoal, sugar and other contraband that bring in millions of dollars annually. This has however reduced following the capture of Kismayo by KDF but it still a source of income for the terrorists.
Financial Infrastructure Used By Al Shabaab To Move Money
- Hawalas– a traditional Muslim system of hawala, an informal means of transferring value and remittances through networks of brokers. They are used to transfer money with little to no records and as such cannot be traced.
- Cash couriers– al Shabaab uses secret cash couriers that can move money from one person to another without recording anywhere making it easy to exploit as is untraceable.
- Western Union, money gram, m-pesa, and other money transfer agencies- Somalis in the diaspora wire money to relatives as well as terrorists either directly or indirectly through relatives that cannot be liked to funding the terror organization.
- Cryptocurrency- Cryptocurrencies such as bitcoin and Ethereum offer quick transfer of funds that is untraceable through the internet cutting out the middleman and physical meetings and as such enhancing anonymity of sources.
How Does Al Shabaab Spend Its Money?
- Weapons and military-grade equipment
- Social welfare of the fighters and their families including salaries and allowances to both local and foreign fighters.
- Recruitment and training of fighters both in Somalia and neighboring Kenya
- Planning and orchestrating attacks and violent campaigns on targets
- Sponsoring political agenda through its sympathizers
- Propaganda spreading both online and offline through videos and other al Shabaab paraphernalia