By: Utkarsh Ajay Ingale & Leivon Victor Lamkang

The Horn of Africa nation, Somalia, gained independence from the British Protectorate in the 1960s and was subject to military control thereafter. However, when President Mohammed Siad Barre was toppled in 1991, the military dictatorship came to an end. It was followed by a civil war between various factions. Many terrorist outfits moved into the area, taking advantage of the civil unrest. Several well-known ones are the Islamic State of Somalia (ISS), an affiliate of ISIS, and Al-Shabaab, an affiliate of Al-Qaeda.

Various reports in recent times indicate that the Islamic State in Somalia (ISS) has emerged as a financial hub for Islamic states. The primary methods used to obtain these earnings are extortion and using illegal activities to capitalise on the unrest in the region. Moreover, ISS has become global over the past three years, with cases of channelling money across continents. They have emerged as a major financial hub for financing terrorism throughout Africa and worldwide, with instances of transferring money to branches throughout Africa and reportedly even as far as Afghanistan.

Historical Context of ISS in Somalia

The Al-Shahaab group, an affiliate of Al-Qaeda, saw several defections that resulted in the formation of the Islamic State of Somalia in 2015. Notable individuals such as Mohammad Makkawi Ibrahim, Hussein Abdi Gedi, Bashir Au Numan and other al-Shabaab commanders from the south defected. But Al-Shabaab swiftly stopped this expansion.

Later, in October 2015, the defection of Mumin, a well-known Al-Shabaab ideologue, and a small number of his soldiers gave the ISS a steady development. Mumin is regarded as one of the important members of the ISS worldwide leadership today. Under his leadership, ISS took control of the northern port town of Qandala in 2016. The organisation was extended and designated as an official province of the Islamic State later in 2017.

Today, the group’s primary base is in the Bari region of Puntland’s northeastern mountains, where it faces competition with Al-Shabaab. Furthermore, Somaliland has become a new recruitment hotspot in the region as a result of its connections to traffickers. The group has grown over time to become a crucial part of the Islamic State’s network, majorly through the collection and financing of the terror activities of Islamic States.

Key Sources of Financing

The ISS has sustained itself through diverse and well-coordinated financing mechanisms, taking advantage of regional instability and economic vulnerabilities. Abdeweli Mohammad Yusuf, the finance officer of ISS, has played a vital role in raising funds for the organisation, which has now become a hub for disbursing funds and providing guidance to other IS affiliates across the continent. ISS generates revenue of more than hundreds of thousands of dollars per month through extortion of financial institutions, mobile money service providers, and other local businesses in Port Basaso in the Bari region of Somalia. In the first half of 2022, ISS yielded nearly US$ 2 million by collecting extortion payments from local businesses related to imports, livestock, and agriculture.

Additionally, in the Puntland region, it has generated funds through exporting businesses in the seaport city of Basaso by exporting small quantities of gold mined in Bari, amassing around US$ 6 million from 2022 till now. The organisation is also involved in illicit charcoal trade, a critical commodity in Somalia. Despite an international ban, the trade has generated millions, with ISS benefiting by taxing smugglers at checkpoints who transport coal to Gulf countries.

Moreover, ISS is also benefiting from foreign donations, mainly from sympathizers in the Middle East and North Africa. ISS has received donations via cash transfers and money laundering through businesses, hawala, banks, and mobile money transfers within Somalia. A report published by the Global Initiative against Transnational Organised Crime in 2020 highlighted how Somalia remains a hotspot for terror financing in Africa through Hawala Channels. Therefore, despite global efforts to curb terror financing, ISS has demonstrated an ability to adapt and diversify its financial portfolio and emerged as a focal point of the terror financing network in Africa.

Terror Financing Networks in Africa

Due to its excellent fundraising skills, ISS plays a crucial role as a financer to the Islamic State’s more comprehensive African network, despite its limited territorial reach and operational capabilities.

In 2020, the Islamic State reoriented its strategy for Africa by establishing the Al Karrar office in Puntland, Somalia, to coordinate operations in Africa. Al Karrar’s office became a hub for conducting and guiding operations of the Islamic state throughout the continent. Under Al Karrar’s office, ISS became responsible for collecting and distributing funds to various IS affiliate groups in Africa. The funds are further employed to sponsor various terror activities in other regions, such as Mozambique’s Cabo Delgado province and the eastern parts of the Democratic Republic of Congo, where IS affiliates have carried out insurgencies.

Moreover, ISS’s financial reach extends beyond Africa. According to the International Crisis Groups report, ISS Somalia has managed to funnel money from its core region in Africa to far-afield groups such as the Islamic State of Khorasan Province in Afghanistan. This case highlights the strategic shift by Islamic states, where they leverage local affiliates to expand and finance their operations into new regions such as Africa and Afghanistan.

Consequences for Africa’s Security

Terror financing poses a significant threat to the internal security and domestic stability of many African states. The funds generated are used to sponsor various terror activities, which further exacerbate regional conflicts.

ISS supports insurgency in Mozambique’s Cabo Delgado province, where more than 4000 people have been killed since 2017. IS Somalia has financially backed local IS affiliates, such as the Islamic State of Central Africa province, to carry out violent operations in the region. This insurgency has also hindered Mozambique’s critical Liquefied Natural Gas (LNG) projects, halting regional development activities.

In the Democratic Republic of Congo (DRC), various IS affiliate groups, such as the Allied Democratic Forces (ADF), are conducting violent attacks. In 2023 alone, the ADF is responsible for the deaths of more than 1000 people in the region. The influx of money from Somalia has allowed these groups to expand their operations and worsen the humanitarian crisis in the region. The flow of funds within these networks sustains long-term terror operations and becomes a significant threat to the domestic stability and national security of states in Africa and beyond.

International Response and Challenges

This growing threat of the ISS has been a matter of concern for the International community. To curtail this growth, efforts have been made by different states. For instance, the US Military, in particular, has conducted air strikes targeting ISS militants. The US has also been working closely with regional forces like the African Union Mission in Somalia (AMISOM) and its successor, The African Union Transition Mission in Somalia (ATMIS).

Further, sanctions and financial restrictions to disrupt the ISS funding and supply lines, as well as various intelligence sharing and counterterrorism cooperation initiatives, have also been put into effort by international actors like the United Nations and the African Union.

However, these efforts to tackle ISS are faced with challenges like the disputes between Mogadishu and authorities in Puntland over power and resources in the region. Leading to disruption of sharing of intelligence and lack of development of joint strategies of ISS extortion rackets and other illicit activities. Due to these factors, ISS remains a dangerous actor in Somalia, competing for influence with Al-Shabaab in the region.

Conclusion

The African Continent is becoming the new theatre of terrorism due to the emergence of terrorist groups, such as the Islamic State of Somalia, in recent years. The terror financing by ISS is becoming a significant threat to the regional security and stability in the region. ISS operates through intricate financial networks to fund terror activities across the continent and beyond. The expanding influence of ISS draws attention to the problems of regional instability and poor governance. Addressing this impending threat would require increased international coordination, better local government, and robust multilateral initiatives to stop the continent from becoming even more unstable.