Page 39 - An Illusion of Complicity: Terrorism and the Illegal Ivory Trade in East Africa

26 An Illusion of Complicity

major financial hub for both organised crime and Somali businesses moving funds to Somalia
through hawala.21

Following the Westgate and Garissa attacks of 2013 and 2015, the Kenyan state has initiated
severe crackdowns on businesses, mosques and MSBs supporting hawala transfers thought to
be funnelling money to Al-Shabaab – and to radical Islamist schools in Kenya.22 It remains to be
seen what impact such measures will have on these pervasive income streams.

Taxation and Extortion

Various forms of local revenue generation in Somalia itself are also known to be significant.
These include, in particular, Al-Shabaab’s ability to exploit commercial activities in the areas
it controls.23 Taxation and the imposition of zakat (an Islamic charitable tax), extortion and
‘protection’ of trade operating through its (albeit declining) territory comprise a highly effective
system through which the group can generate significant and broad-based revenue.24 Research
by the UNMGSE suggests that Al-Shabaab regularly assesses legitimate businesses within
its territory and imposes a proportional tax.25 In 2011, the UNMGSE reported that $10 per
cultivable acre of land was levied on farmers every year and a consumer tax enforced at general
stores. In 2013, Gettleman and Kulish reported that a $2 ‘customs duty’ was imposed per bag of
rice, collected at designated checkpoints.26

Meanwhile, the group has made an art of road taxation and protection racketeering. In 2011,
Roland Marchal assessed ‘protection money’ to represent Al-Shabaab’s principal funding
source.27 In some cases, the lower fees the group allegedly charges on licit trades compared to
Kenyan and Somali customs appear to have actively encouraged local businessmen to move their

21. Authors’ interview with Western diplomat 2; authors’ interview with Western law-enforcement
liaison officer, 24 April 2015; ICG, ‘Kenyan Somali Islamist Radicalisation’, p. 9; Vilkko, ‘Al-Shabaab’,
pp. 11–15.

22. Jambonewspot.com, ‘12 Shops in Nairobi City Center “Funding Terrorists”’, 10 April 2014, <http://
www.jambonewspot.com/12-shops-in-nairobi-city-center-funding-terrorists/>, accessed 23 August
2015; Joseph Netto and Faith Karimi, ‘Kenya Attack: Accounts Suspected of Funding Terrorism
Frozen after Massacre’, CNN, 9 April 2015; Star, ‘List of 86 People, Entities Whose Accounts Were
Frozen by Kenya for Allegedly Funding Terror’, 10 April 2015.

23. Roland Marchal, ‘The Rise of a Jihadi Movement in a Country at War: Harakat Al-Shabaab Al
Mujaheddin in Somalia’, Sciences Po, Paris, March 2011, p. 73, <http://www.sciencespo.fr/ceri/en/
content/rise-jihadi-movement-country-war-harakat-al-shabaab-al-mujaheddin-somalia>, accessed
23 August 2015.

24. Authors’ interview with Western diplomat 5; authors’ interview with director of research institute;
Keatinge, ‘The Role of Finance in Defeating Al-Shabaab’, p. 17.

25. UNMGSE Report, 18 July 2011, p. 28.
26. Ibid.; Jeffrey Gettleman and Nicholas Kulish, ‘Somalia Militants Mixing Business and Terror’, New

York Times, 30 September 2013.
27. Marchal, ‘The Rise of a Jihadi Movement in a Country at War’, pp. 67–68. Refusal to pay risks

harsh reprisal: in February 2014, Al-Shabaab arrested fifteen members of the telecoms company
Hormud in Jilib for refusing to pay $50,000 in protection money to the group. See Ken Menkhaus,
‘Al-Shabab’s Capabilities Post-Westgate’, CTC Sentinel, 24 February 2014.