By Mohamed Muse

Though there seems to be no practical way for Al-Shabaab to have a sustainable economy, they have somehow managed to grow financially overtime.  

Al-Shabaab’s major revenue comes mainly from; illegal production and export of charcoal to the Middle East, sugar to Kenya, extortion rackets of local business and residents, hijacking humanitarian aid workers for ransom, and contributions from sympathizers.

Dismantling their financial empire has proved to be difficult, as their system involves complex transactional systems, a susceptible economic oasis fueled by poverty and scarcity, corruption, lack of proper policing systems, support within certain groups etc.

The major source of income for Al-Shabaab is its illegal trading system, which spans the globe as reported by The Inter Press Service Agency (IPS) in March 2018. IPS reported that Al-Shabaab generates millions of dollars of revenues through a coordinated trading cycle built upon the export of charcoal, which in turn finances the import of sugar, much of which is subsequently smuggled across as contraband into neighboring countries, particularly into Kenya. Shipping companies deliver sugar to ports in Somalia and collect charcoal for the return journeys. Bank accounts in the Gulf States where the profits of this trade are deposited can be used to launder voluntary contributions to Al-Shabaab through fraudulent invoicing, overvaluing of import proceeds and undervaluing of exports. This trade cycle is dominated by networks of prominent Somali businessmen operating mainly between Somalia and the Gulf Cooperation Council (GCC) countries, notably Dubai in the United Arab Emirates.

As it can be surmised, such complex financial dealings have made the fight against Al-Shabaab very hard.

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