How sugar funds the Al-Shabaab
The complex interplay between economics, trade policies, and security threats often yields unexpected outcomes. In the case of Al-Shabaab, the extremist group based in Somalia, sugar has emerged as an unexpected lifeline, intertwined with both its financial sustenance and the broader regional dynamics.
High tariffs on sugar imports in Kenya, ostensibly meant to protect domestic producers, are inadvertently fueling a thriving illicit trade in sugar from neighboring Somalia.
This cross-border trade has become a key source of revenue for Al-Shabaab, raising questions about the unintended consequences of trade protectionism and the multifaceted nature of terrorist financing.
Kenya’s domestic sugar production consistently falls short of meeting its rising demand now at over 1.1 million metric tonnes annually. A deficit of over 300,000 metric tonnes per year is filled partly by legal imports.
A December 2022 report Terror and Taxes; Inside Al-Shabaab’s revenue collection machine says a portion of Kenya’s sugar deficit is met through illicit channels, particularly from Somalia.
Sugar “most smuggled good” into Kenya
Shockingly, sugar is touted as the “most smuggled good” into Kenya, responsible for almost half of recorded smuggling cases. The sugar making its way across the Kenyan border often originates from Brazil and enters through Dubai before reaching its final destination in Kismayo.
Reports from the United Nations and various studies highlight the significant role played by the illicit sugar trade in financing Al-Shabaab. A 2011 UN report estimated that the group garnered between US$400,000 and US$800,000 annually by taxing sugar destined for Kenya. Subsequent reports suggested that the actual figure could be much higher.
While media attention has largely focused on the centrality of sugar to Al-Shabaab’s revenue streams, it is important to contextualize this within the broader economic activities that sustain the group.
Contrary to popular belief, sugar is just one piece of Al-Shabaab’s intricate economic puzzle. The group has embedded itself deeply into Somalia’s economic landscape. It extracts a percentage of the value from the entire cross-border trade between Somalia and Kenya.
Read also: Kenya reverses border decision as Amisom exits Somalia
Al-Shabaab’s taxation strategy
Rather than singling out specific commodities, Al-Shabaab’s taxation strategy loops a wide array of goods, treating sugar on par with other food items and mixed cargo. This all-encompassing approach underscores the need to address the illicit trade holistically to disrupt the group’s financial operations.
Kenya’s protectionist policies aimed at safeguarding its domestic sugar industry paradoxically contribute to Al-Shabaab’s revenue stream. By inflating the price of sugar through high tariffs, Kenya inadvertently fuels the demand for illicit sugar from Somalia.
This, in turn, expands the volume of cross-border trade subjected to Al-Shabaab’s taxation. In essence, Kenya’s efforts to shield its domestic sugar market are amplifying the financial resources available to the terrorist organization.
The intricate relationship between sugar, trade policies, and terrorism in East Africa highlights the unintended consequences that can arise from seemingly well-intentioned actions.
Al-Shabaab’s reliance on the illicit sugar trade underscores the need for a comprehensive approach to disrupting its revenue streams, which extend far beyond a single commodity.
On or around 2015, the report by Geneva-headquartered Global Initiative says a ‘sugar unit’ briefly existed within Kenya’s National Intelligence Service, charged with combating contraband sugar flows into the Dadaab refugee camps.
Kenya has reversed its decision to re-open its borders with Somalia after a spate of terror attacks following the exit of Africa Union (AU) troops in the troubled country.
“We have stopped that plan (to re-open borders) for a period to allow us to deal with the militants,” Interior Cabinet Secretary Kithure Kindiki said in July at Daadab refugee camp.
As the region grapples with security challenges and economic complexities, a balanced consideration of trade policies and national security interests is imperative to mitigate inadvertent support for illicit activities.
