Four years after the Kenya Defence Forces stormed into Somalia to neutralize al-Shabaab, it has instead a guarantor it the terror group’s finances, a new study reveals.
Journalists for Justice’s new report, Black and White: Kenya’s Criminal Racket in Somalia, recalls that the UN sanctions committee banned the export of charcoal from Somalia in 2012 because the trade was a major financial pillar of al-Shabaab and that it “might pose a threat to the peace, security or stability of Somalia.”
Al-Shabaab taxes each stage of the charcoal business and has close relationships with the businessmen at the centre of the trade who pass on profits to the group. The UN Monitoring Group on Somalia and Eritrea estimated al-Shabaab’s earnings from taxing trade at the Kismayo port at around Sh2.5 billion ($25 million).
After Kenya Defence Forces captured the port of Kismayo, they found a stockpile of over 1 million sacks of charcoal at the port which the UN asked that it be not exported and trade be suppressed. Kenya appealed to the UN to lift the ban was asked not to export and resumed exports while working with the Ras Kamboni Brigades, which controls Jubaland in southern Somalia, and al-Shabaab.
At the time of the invasion, the UN estimated that al-Shabaab’s revenues from taxing illicit trade went well above the usual $25 million. The most recent UN report, released last month, says charcoal smuggling is still vibrant and occurring at smaller ports and at the southern port of Buur Gaabo.
The UN monitoring group estimates that every month, around 1 million bags of charcoal are exported through Kismayo, which is secured by KDF and Ras Kamboni. In its 2014 report, the UN monitoring group said the port duty was $3 per 25kg sack of charcoal. By April 2015, when JFJ visited the port, it was still $3. Of the $3, KDF takes $2, the loaders at the port and journalists said, with the balance divided between Jubaland and al-Shabaab.
This means that from the port tax on charcoal alone, until at least six months ago, the KDF network (and al-Shabaab) in Kismayo was making Sh100 million ($1million) to Sh200 million ($2 million) per month, or between Sh1.2 billion ($12 million) and Sh2.4 billion ($24 million) a year. These amounts have been validated by receipts seen by the UN monitoring group, although charcoal traders in Dubai told investigators that the actual export amounts are much higher.
UN reports estimate that al-Shabaab collects up to Sh1.5 billion ($15 million) from checkpoints alone and another $1 million per month in export taxes at the Kismayo port. Through its affiliations to the traders, the group has a 30 per cent shareholding of the total market value of the charcoal. Until recently, charcoal exports from Kismayo were estimated at around Sh35 billion ($350 million) to Sh40 billion ($400 million) per year, not to mention exports from Barawe and other smaller ports. In total, charcoal nets al-Shabaab revenues of at least Sh10 billion ($100 million) per year. It is a massive trade on an industrial scale: still southern Somalia’s biggest export by far.
The profit from the sale of the charcoal itself is far greater than the taxes levied upon it. According to the monitoring group, 12 million bags a year has a market value of between $350 million and $400 million. The UN reports of 2013 and 2014 name 30 traders in the Jubaland Chamber of Commerce — many of whom are Kenyans based in Garissa, and one of them, a Nairobi based trader called Haji Yassin. Several of those named in the UN report are described as being affiliated to al-Shabaab and acting as tax collectors and fundraisers for the group.
Yet, as one UN official explained to JFJ, “these guys move freely in and out of Kismayo,” the KDF makes no attempt to stop them or to enforce the sanctions.
Since the previous monitoring group reports and international attention on the continuation of the charcoal trade despite the ban, the presence of large charcoal stockpiles in Kismayo has been something of an embarrassment. In 2014, monitoring group staff reported that they were prevented from visiting the port until all charcoal loading had ceased. The October 2015 report cites stockpiles being moved.
In April 2015, JFJ also established that the charcoal stockpile that had been near the port at Allanley had been moved five minutes’ drive outside of Kismayo to an open air place called Dulitka Balcada. The facility was well guarded by spies and armed men. The area is around four square kilometres holding millions of bags of charcoal where, according to the workers, around 1,500 people are employed. Loaders told JFJ that there are additional stockpiles at Hosingow, Jana Abdulle, Badade, and Bagdada.
The monitoring group estimates that al-Shabaab affiliated traders control around 30 per cent of the trade, and thus the profit. Until recently, and possibly still, this means that Jubaland and KDF-affiliated traders control the remaining 70 per cent. The market value of the remaining charcoal is over $200 million per year. Plus the Sh1.2 billion ($12 million) to Sh2.4 billion ($24 million) collected at the port. Cutting off al-Shabaab’s revenue streams would also sever KDF and Jubaland authorities’s own sources of cash.
According to a UN official interviewed by JFJ, there is a “fairly formal relationship” between the administration of Madobe and his former al-Shabaab colleagues when it comes to the charcoal business. Both have appointed special representatives on charcoal who negotiate the terms of their coordination and profit-sharing. Madobe of course is very close to Kenya. Workers at the port in Kismayo said that the port manager, “Hadun”, was a close associate and relative of the former Kenyan Defence Minister, Yusuf Haji, and that he had been placed there by his relative.
Journalists in Kismayo claimed the same, pointing out that “Hadun” is from the same sub-sub-clan (Aden Abdalla/Abdalla/Ogaden). It would appear that a Kenyan cartel made up of senior military and political figures is pulling the strings of the charcoal-sugar trade from both sides of the border.
Download the Full Report