The business of terrorism

Terrorism is a highly lucrative money-minting business. While other economic sectors suffer, sadly there are others which gain immensely from terror activities, writes Wanjohi Kabukuru from the Kenyan capital Nairobi.

The security, banking and insurance sectors are some of the industries that have seen growth and benefits, with the rise of terrorist threats globally. In some cases the benefits come from funnelling and laundering the proceeds of terror. Worldwide, the defence sector or the military- industrial complex, as it also referred to, has also gained tremendously in the last decade.    

In terms of military expenditure, Kenya tops East Africa as the largest importer of weaponry. In 2013 Kenya allocated some $846m for its security expenditure. This was more than what was allocated to the health and agriculture ministries, whose combined allocation was $832m.

At the heart of all this increased security expenditure is al-Shabaab, which seems to have active cells spread out in East Africa. A study conducted by the United Nations Office on Drugs and Crime (UNODC) found that East African nations are still attractive for criminals and terrorist organisations to launder their spoils.

“The legislative framework to combat organised crime, money laundering and the financing of terrorism is weak in Rwanda, Tanzania and Uganda, leaving these countries vulnerable and attractive to criminals to use them as safe havens,” UNODC says. 

Al-Shabaab is believed to have benefited from the annual $53 million piracy booty.

But this is not just limited to the regional countries alone. Bab el Mandeb, the strait between Yemen, Djibouti and Eritrea connecting the Red Sea to the Gulf of Aden, is an important sea lane for crude oil, accounting for some 30% of the world’s total supply.

It is this strait and Somalia’s instability which has seen the US, France, Japan, and the EU building military bases in Djibouti and running naval fleets along the Western Indian Ocean rim under the pretext of anti-piracy operations. The European Union Naval Force Somalia (EU-NAVFOR) budget since 2010 totalled €39.65m ($54m).

The 600-acre US Camp Lemonnier in Djibouti has a $1.2bn budget set aside for the next 25 years. France and Japan pay €30m ($41m)each to Djibouti for the lease of their respective military bases in this tiny Horn of Africa nation.

The developed nations are also strategically positioned themselves within the Horn of Africa to protect their mineral and oil interests from both the Middle East and Africa. Recent oil and gas finds in the western Indian Ocean shelf have only increased the interest of the region to the world and go a long way in explaining the increase in defence spending, not to mention the rise of terrorism threats and al-Shabaab’s stature.  Meanwhile, it is not only how the terrorist groups are rising, but how they are financially connected, which is of growing concern.

Al-Shabaab 

Previously al-Shabaab was believed to be benefitting from the annual $53m piracy booty but this was not confirmed. Al-Shabaab like all similar organisations is much more than just a terror organisation. It is also a money-minting entity.

When the Kenya Defence Forces (KDF) captured al-Shabaab’s stronghold of Kismayu on Somalia’s south coast in September 2012 they dealt a severe blow to one of the militant group’s financial arteries. Kismayu port not only accorded al-Shabaab regular income in terms of port fees and taxes but was the main export point of charcoal to the Middle East, which earned the group some $25m a year.

According to the UN Monitoring Group on Somalia and Eritrea, informal taxes, ransom, extortion, remittances from the Somali diaspora and state sponsorship from various nations, are some of al-Shabaab’s main sources of funding.   

But even as they source for funds to finance their operations, it has emerged from the multiple arrests made that there is a closely-knit collaboration between al-Shabaab and other terror groups not just in eastern Africa but across the continent. Indeed, terror organisations seem to be well connected and to enjoy cordial relations free of the bureaucracy commonly seen in African government agencies.

It has been established that al-Shabaab has close working relations with other similar factions in the African continent such as al-Qaeda in the Islamic Maghreb (AQIM), Ansar Eddine, Boko Haram, Movement for Unity and Jihad in West Africa and Oneness (MUJAO), al-Mouthalimin Brigade and Ansaru Islamists. Regionally, al-Shabaab’s influence is finding traction with similar groups in East Africa, allowing it to gain a foothold where it once lacked support.