(Al-Shabaab video)

Inside the Financial System that Fuels Al-Shabaab’s Operations

A new paper from the Hiraal Institute in Mogadishu discusses Al-Shabaab’s (AS) financial system and estimates the amount collected by the group, based on figures provided to Hiraal by former AS finance and Zakawaat officials. With the rise of Islamic State in Somalia, AS is not the only terrorist group currently involved in tax collection in Somalia; however, it is currently the largest, and this paper therefore focuses on the group.

AS has two main departments that collect taxes from the public: the Zakawaat Office and the Finance Office. The former is tasked with collecting non-monetary taxes such as livestock and farm produce, while the latter collects all monetary taxes.

The first head of the Zakawaat office was Sheikh Fuad, who notoriously paid all the collected Zakah to the poor, leading to his immediate dismissal after his first year in the job; Al-Shabaab had a different interpretation on how the Zakah should be used, and afterwards only a small fraction was given to the poor. The office is currently headed by Mohamed Mire, who is from Puntland.

The AS Finance Department was originally formed when the group conquered its first port city, Barawe, in 2008.The first Head of Finance was the deceased ‘Al-Maqdisi,’ who was from Bosaso. He built the department from a ragtag, informal, highly inefficient office to become the most ruthless collection entity in Somalia. It is currently headed by Hassan Afgoi.

AS is financially self-sufficient; however, its expenses are ballooned by recurring payments to hundreds of officials and local influencers, many nominally in charge of areas not controlled by the group. The group has however managed to raise emergency funds to keep itself afloat, and has never failed to pay its fighters and administrators.

Download the full report here: AS Finance System

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