The report titled “Al-Shabaab’s Arsenal from Taxes to Terror” indicated that the Al-Qaeda linked terror outfit spends 2 million US dollars monthly, where 1.8 million is used on ‘in-house’ explosives while other weapons manufacturing goes for 150,000 dollars per month.
“Additional expenditure from within the Amniyat budget – which in total is assessed at over USD 21 million per year – is likely: some procurement does take place through local units, mainly focused on small arms and ammunition, but it is unclear if other Amniyat equipment is financed from within the Amniyat or arms procurement budgets,” the report read in part.
Hiraal Institute stated that the militant group was believed to have an annual revenue collection of about 180 million dollars as of 2021 with planned expenditure of around 100 million dollars.
“Of this security-associated expenditure accounts for the vast majority of AS planned expenditure, at around 70–75 per cent. This security related expenditure includes that which is undertaken by the Jaish and Amniyat,” the report said.
It added that “both organizations are responsible for paying salaries and stipends to their personnel, with rates that vary according to the rank and status of the individual (married/ non-married).”
“This expenditure does not, however, include major operational expenditure or investment into specific capabilities (such as drones), which are believed to be funded from the financial surplus that AS gathers, estimated at around USD 80 million per year,” Hiraal Institute said.
The research group noted that that the figures are the forecast expenditure pointing out that they do not include “off-budget or non-forecast expenditure or additional sums drawn from the Al-Shabaab’s financial surplus.”
According to the report, funds are moved through regular Shabaab financial channel including cash, bank accounts, mobile money transfer, and hawala system- an informal funds transfer system that allows for the transfer of funds from one person to another without the actual movement of money.
“Al-Shabaab operates a hierarchical financial administrative structure. A central Finance Maktab headquarters oversees a financial centre under which provincial financial centres (one per AS designated province) operate,” the report said.
The report further stated that the Al-Qaeda linked jihadist group uses a variety of methods when procuring arms depending on the arms needed and from where they are being sourced.
It pointed out that some procurement takes place from local black markets in Somalia, either directly by the militants themselves or via business associates.
Other procurement involves placing of orders and contracts with arms traders in Somalia or abroad mainly from Yemen.
“Reporting indicates that only in a minority of cases does the group undertake procurement directly – that is, with members of the group selecting and purchasing arms themselves; for the majority of the time, the group utilizes arms suppliers, illicit traders, and smugglers, effectively contracting out its procurement and transferring the risk involved,” the Research group said.
The Al-Shabaab militants have staged a series of major attacks both in Somalia and the neighboring countries including Kenya leading to the loss of hundreds of lives.