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‘If I don’t pay, they kill me’: Al-Shabab tightens grip on Somalia with growing tax racket

By Omar Faruk and Max Bearak 

MOGADISHU, Somalia — The calls from an unknown number had been coming for weeks, but Osman, a household-goods trader in the Somali capital’s largest market, disregarded them — until he got the text message.

Residents shop at an open-air market in the Hamarwayne district of Mogadishu, Somalia. (Omar Faruk/For The Washington Post)

“Will you pick up our call? Yes or no. This is the mujahideen,” it said. The mujahideen, the Islamist militants, al-Shabab. He knew right away what they wanted: to capture him in a protection money racket that the extremist group has been expanding across Somalia for years. 

“My heart could barely pump blood in that moment,” said Osman, 45, a father of seven, who spoke on the condition that only his first name be used out of fear for his life. “If I don’t pay, they kill me.”

When Osman replied “yes,” he found that al-Shabab knew the size of his business and even how many containers of goods he imported through the city’s seaport. Don’t lie to us, they told him, we have the manifests from the ships to cross-check. 

Interviews with a dozen business owners in Mogadishu reveal al-Shabab’s quickly growing ability to tax the country’s most lucrative businesses, which analysts and former government officials say earns the group tens of millions of dollars per year, which it uses to fund its attacks on government and military targets, as well as on those who refuse to pay up.

In most of rural Somalia, al-Shabab is in firm control and operates a parallel government. It has its own courts, road tolls and tax collection. But that system is spreading into Somalia’s capital, undermining the legitimacy of the U.S.-backed federal government in the only city that government reliably controls. 

“It is a very scary situation,” said Somali Finance Minister Abdirahman Beileh. “We have not been able to address it. It is the number one problem in this country.”

The growth of al-Shabab’s tax revenue stands at odds with the federal government’s claims that the insurgency is on its back foot — and in sharp contrast to the U.S. military’s claims that its operations in Somalia are weakening the insurgency. 

A spokesman for U.S. Africa Command, John D. Manley, said in an emailed statement that the U.S. military targets al-Shabab’s “financial and collection operations” with airstrikes. He acknowledged that the militant group is “generally successful using threats and violence to intimidate clans and locals into paying taxes.”

The United States, which has about 500 troops in Somalia, says it has conducted nearly 50 drone strikes this year, killing more than 300 fighters. Most analysts put the number of al-Shabab fighters somewhere just short of 10,000, though the true number is hard to discern, as many of the group’s members blend in and out of civilian life. 

Al-Shabab, in turn, has carried out more than 850 attacks — from kidnappings to large bombings — across Somalia this year, killing around 1,600 people, according to the Armed Conflict Location and Event Data Project. The U.S. government has long feared that, as in Afghanistan, instability in Somalia could provide international terrorist organizations a base for operations. The Islamic State, which sometimes clashes with al-Shabab over territory, has a small but active branch operating mostly in northeastern Somalia. 

While armed conflict besets much of the country, Beileh’s ministry and al-Shabab now compete over the most basic function of governance: to collect revenue and provide services. The government brings in almost $200 million per year, and although al-Shabab takes in only a small fraction of that, it collects from a broader base of businesses. That base now includes the seaport, the government’s most lucrative source of income.

The Somali government is considering a law that would make it illegal to pay taxes to al-Shabab, but traders argue that such a move would put an even greater burden on them. Many complain that the government can barely keep them safe and that criminalizing their payments to al-Shabab would endanger their lives. 

Osman and other traders described how, in the past year, al-Shabab has instituted a simple, tiered system for taxing almost all the goods that enter Somalia through Mogadishu’s seaport, stemming from the group’s ability to get ship manifests by threatening shipping agents. 

A 40-foot container is taxed at $160, while 20-foot ones cost $100. Although the exact number of traders that al-Shabab taxes isn’t clear, analysts think the group’s new ability to tax imports could add millions to its annual revenue on top of what it collects from business owners. Ahmed Washington, the port’s manager, did not respond to requests for comment.

“When I told [al-Shabab’s tax collector] I had two containers at the port, he called me back and said, ‘No, you have three this month. You have lied to me,’ ” said Hilowle, 48, who has traded in curtains, clothes and footwear at Mogadishu’s Bakara market for 20 years. He was shocked that al-Shabab knew about containers before they even arrived — his third would only reach Mogadishu a few weeks later.

Paying al-Shabab’s taxes is relatively straightforward and happens through banks, mobile money transfers and the age-old “hawala” system of moneylenders prevalent in Somalia and some Middle Eastern countries, the traders said. The money is then redistributed to al-Shabab cells throughout the country.

Read more: ‘If I don’t pay, they kill me’: Al-Shabab tightens grip on Somalia with growing tax racket

Source: Washington Post

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