Why Shabaab’s growing tax racket is big threat to Kenya

Businessmen in Mogadishu are linking terrorist group Al Shabaab’s increased attacks on Kenya to their rapidly expanding tax collection racket that is now threatening to overrun official government structures.

The latest – an attempt to overrun the equivalent of Kenya National Chamber of Commerce and Industry – has seen businessmen come out blazing in defending what they call the last stronghold of Somali’s civility and pride.

According to sources within the Somalia Chamber of Commerce and Industry, the terrorist organisation collects $4 million to $5 million (Sh400 million to Sh500 million) a month.

In multiple interviews, petrified businessmen running various businesses in Mogadishu spoke of the growing fear and helplessness in their forced dealings with the terrorist group.

“They are making tremendous progress to take over all formal institutions in Mogadishu except for the main government. The fact that we are baring it out speaks volumes,” a businessman told the Sunday Standard.

“Yes, we have previously paid informal taxes to them but now it’s gotten worse… the amounts, the influence, the threats and the pressures.”

Late last year, the Washington Post ran an expose on the growing influence of Al Shabaab on commercial activities. In the expose, Somalia’s Finance minister Abdirahman Beileh admitted that the situation was getting scary.

Zero service

“We have not been able to address it. It is the number one problem in this country,” Beileh said.

In the interviews, businessmen operating in Mogadishu attested to Shabaab’s expanding capacity to tax almost all businesses, and which was then spreading into Somalia’s capital. The businessmen and journalists we spoke to this week now say they are fully in charge.

“They are now pricing everything, everything… And all for, you could say, zero service. People here are hopeless and just have to put up with the situation,” a journalist said on the phone.

The businessmen say Al Shabaab appears to be riding on razor-sharp intelligence, so much so that even picking calls nowadays in Mogadishu is an issue, because you do not know who could be on the other side threatening or demanding. “You can feel it as you go around your business in Mogadishu. It’s getting worse every month. Even ministers now don’t trust their assistants and vice versa. They can no longer fully express themselves. Nobody knows who is who, all in a span of a few months,” said a trader.

The sad bit, they say, is that the government is paying zero attention to the take-over of the port city. When in December the chair of Somali Chamber of Commerce and Industry Mohamud Abdikarim Gabaire appointed Ahmed Abdullahi as the chamber’s Banadir region chair, the businessmen rose in protest.

There had been fears that Abdullahi had been fronted by the insurgent group, claims which were denied by both himself and Gabaire. On December 17, the ministry of commerce and industry dissolved the traders union of Banadir region the same day Gabaire and Abdullahi denied allegations of the Shabaab influence.

According to the businessmen we spoke to, where there is smoke there is fire. They say the past conduct of business at the leadership of the association betrays the claim that there is no Al Shabaab influence.

Besides commerce, Al Shabaab has also succeeded in the past few months in infiltrating formal structures of the Mogadishu government, with recent revelations of university lecturers and even dancers doing their bidding.

Influence

“The chamber and its membership has quite the influence and access to government officials, including the president. You do not want to entertain the thought, let alone the reality, of the group taking it over,” a member of the association who spoke on condition of anonymity, said.

The fear is that with the chamber at its beck and call, the terrorist group will legitimise most of its operations without raising an eyebrow out there.

The protesting members called for heightened surveillance and vetting of high-profile appointments such as those of the chamber. They said the Kenyan model of intelligence-based vetting of public appointees would help the country.

They fault president Mohamed Abdullahi Mohamed aka Farmajo’s government for looking the other way as Al Shabaab reclaims the capital. They praise ex-president Sheikh Shariff’s government for pushing the terrorist group out of the city and warding off their influence on commercial transactions in the city.

“We are now rolling back the gains we had made. The common joke here, nowadays, is that we have an air force but no ground force. This is because Farmajo cannot go from one end of Mogadishu to the other without flying,” said a member of the chamber.

The businessman painted a picture of untenable situation that will be obtaining in Mogadishu in the next few months if Al Shabaab continues to exert influence and authority. “The government and the region needs to refocus and pay more attention to what is happening here. The oversight organs in Somalia need to be more responsive and to know history will judge them harshly if they give up their role,” a trader said.

They also said the region will pay dearly for allowing the Mogadishu administration to embolden the insurgents through unbridled taxation.

“We feel terrible that this is the money being used to fund terrorist attacks, which continue to hurt our people. But the world must know that we are helpless and forced into this kind of situation.”