Will Somali authorities succeed in drying up Al-Shabaab’s sources of funding?

The Somali government has issued a strict warning to business owners, entrepreneurs, and citizens, prohibiting any financial support to Al-Shabaab as part of its efforts to combat terrorism and cut off funding sources for extremist groups.

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The government has pledged to take strict legal action against anyone collaborating with the group, emphasizing that any financial dealings with Al-Shabaab harm Somali society and strengthen the terrorists’ ability to carry out deadly attacks.

These governmental measures aim to undermine Al-Shabaab’s financial foundations. Authorities hope that this will weaken the group’s ability to threaten the country’s security and stability, according to Al-Bawaba News.

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Experts estimate that Al-Shabaab, which is affiliated with Al-Qaeda, requires $100 million per year to finance its operations, a massive amount compared to Somalia’s $250 million national budget. To raise these funds, the group relies on complex networks of crime and extortion.

Al-Shabaab generates these large sums through an elaborate extortion system, including taxing shipping companies operating in Somali ports, setting up checkpoints on major roads, forcing people to travel through controlled areas, and coercing business owners and citizens under its influence to pay a tax disguised as Zakat.

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In an analysis published by the Africa Center for Strategic Studies, researcher Wendy Williams stated that Al-Shabaab has established “a sophisticated criminal enterprise that has infiltrated multiple levels of governance, forcing many businesses and communities into compliance.”

The group controls 10 out of 18 federal states in Somalia and maintains detailed records of citizens and their assets to impose Zakat, which amounts to 2.5% of their wealth. Those who refuse to pay risk being executed.

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Williams further noted: “Intelligence and the threat of violence allow Al-Shabaab to profit from shipping imports and real estate transactions, even though it does not directly control major commercial hubs like Mogadishu and Bosaso.”

In response, Somali authorities have announced strict legal actions against any companies or individuals cooperating with Al-Shabaab, including revoking government permits required for conducting business.

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