Is Somalia’s Al Shaabab better at tax collection than most low-income states?

Most low-income states rely on trade taxes (at borders) rather than on income taxes. A common explanation for this phenomenon is that these states lack capacity to collect income taxes among largely rural populations that rely on subsistence agriculture.

The idea here is that it is easier to collect taxes in economies with large firms that act as fiscal intermediaries. But as it turns out, the case of Al Shabaab — the Somalia-based terror group — shows that it is possible to raise non-trivial amounts of revenue from rural populations.

This is from the Hiraal Institute:

Zakawaat is collected by troops mobilised from different AS departments, assisted by clan elders; they are put into action during the collection season, which is traditionally the month of Ramadan. The starting rate is one camel out of every 25 camels owned and one goat out of every 40 goats. Collection is done uniformly across all the regions in south and central Somalia, including in the districts that AS does not control. Collectors issue receipts to pastoralists; those who lose their receipts are made to pay the taxes again in the next year. This ensures that pastoralists who were away from AS territory during the preceding year do not escape payment of Zakah.

Amounts collected vary by district. For instance, in Bardale in 2017, AS managed to collect 2200 goats and 171 camels. In the area around Mogadishu in the same period, 100 camels and 1500 goats were collected as Zakah. This is a relatively small amount of livestock because the area is mainly inhabited by non-nomadic farmers as it is close to Mogadishu and surrounded by urban areas. Likewise, Zakah collection in Barawe in 2017 was 600 camels and 8000 goats; in Wanlaweyn it was 700 camels and several thousand goats. The livestock is auctioned to ASlinked businessmen at an amount that is generally just below the market rate, at $400-$600 per camel according to the animals’ age and $30 per goat. The districts named above are not controlled by AS, yet the group managed to collect more than $1mn in Zakawaat in those regions in 2017. This would translate, at a conservative estimate, to about $8mn annually from livestock Zakawaat throughout South and Central Somalia.

Revenue leakages are rare:

The financial system is tight, with only one known case of a collector who defected with $2800. The auditors in the districts, who receive the monies from the checkpoints, are rigorously vetted before being employed. They declare all their assets, including land, cars, and cash in the bank. They declare their wealth again after being relieved of their duties; any unaccountable wealth is repossessed.

Auditors, some of whom receive up to $50,000 a month, are unable to defect with the money for a number of reasons. First, they are on 24-hour watch by the Amniyaat: in their offices, there are four known members of the Amniyaat. Additionally, other hidden Amniyaat operatives keep watch of their movements. Moreover, they are relieved of their duties every few months and sent on leave.

Finally, Al Shabaab regularly balances its budget:

The AS tax revenues are estimated in this paper at $27mn while its expenditures are at around $25.6mn. While our estimates are conservative, the group breaks even on its balance sheet every year. This is shown by the fact that the emergency tax collection is not done on a regular basis, and not in every region. On the other hand, the fact that emergency collection is sometimes needed shows that AS profits are not significant and its income is just enough to cover its expenses.

Read the whole thing here.

H/T N. Lidow.

The Kenyan Army’s Criminal Racket in Somalia

Quoting from a new report from the Journalists for Justice project:

With the death toll from al-Shabaab attacks inside Kenya rising to over 400, Journalists for Justice felt that the task of examining whether Operation Linda Nchi is actually delivering was overdue. This study looks at the conduct of KDF forces in two areas: 1) sugar smuggling and financial enabling of al-Shabaab and, 2) human rights violations.

This report presents the findings of several months of research in Somalia in Kismayo and Dhobley and inside Kenya in Liboi, Dadaab, Garissa and Nairobi. A desktop review, encompassing UN monitoring reports, academic studies, African Mission in Somalia (AMISOM) communication and media reports was followed by one-on-one interviews with over 50 people with intimate knowledge of KDF activities, including serving senior KDF officers, UN officials, western intelligence officials, members of parliament, victims of KDF human rights violations inside Somalia, journalists, doctors, porters at the charcoal stockpiles, drivers on the sugar routes and middlemen in the Dadaab camp.

…. JFJ research suggests that both KDF, the Jubaland administration of Ahmed Madobe and al-Shabaab are all benefitting from shares in a trade that is worth, collectively, between $200 million and $400 million.

More on this here.

For more on the challenges facing Kenya’s security operation in Somalia see here.

Kenya Security Laws (Amendment) Act, 2014

President Uhuru Kenyatta assented to the Security Laws (Amendment) Act, 2014 (archived pdf here). Despite widespread opposition from a large section of the Kenyan public, amendments therein are now the law of the land. The law itself is a mixed bag. There are some good parts that are meant to streamline the criminal justice system. But there are other parts that will certainly be abused by politicians and over-eager security agents, and could lead to a drastic reduction of civil liberties in Kenya.

This is how the bill was passed:

[youtube.com/watch?v=lc0F7AG-3to]

Members of Parliament and Sergeants-at-Arms guard House Speaker Justin Muturi as he reads the motion to pass to the bill.

Civil Society groups in Kenya, and a section of Members of Parliament, have vowed to challenge the constitutionality of the Act in court.

Will the challenge succeed? The simple answer is I don’t know. The Kenyan Supreme Court leans to the right, and is likely to defer to the executive (and its allies in the legislature) on matters related to security. Plus my bet is that if you polled the law a good chunk of Kenyans would support it. It targets “terrorists” and “criminals.” The mainstream churches in Kenya have also come out in strong support, in no small part because suspected terrorists have made a habit of attacking packed churches along the Kenyan coast.

The judicial review process is unlikely to set aside the entire statute. The petitioners will be better served to focus on key clauses that are unconstitutional and ask the judges to strike those out. But I should reiterate that the judges are likely to defer to Parliament and the executive on this one.

From a legislative studies perspective, what is worrying is that in order to get the law passed  State House essentially told the National Assembly, “Trust me. I need these powers to secure Kenyan lives and property. And I will not abuse them. Trust me.” And then Parliament capitulated. There was no debate over the State’s total failure to use existing laws to prevent and/or deter crime. Or the corruption and gross ineptitude that ails the security sector. Instead the executive was rewarded with even more power, secrecy, and ability to silence criticism from the media. All open to cynical abuse.

What Parliament forgot is that that there are no good politicians; only constrained ones. And that if unchecked anyone and everyone will abuse power. It doesn’t matter whether they are Pol Pot or the Pope.

Will rampant corruption jeopardize Kenya’s ability to prevent future terror attacks?

There is an interesting debate on this question over at the Guardian. Following the terror attack at Westgate Giles Foden made the following claim:

In Kenya crime and terrorism are deeply linked, not least by the failure of successive Kenyan governments to control either……… These attacks are part of a spectrum of banditry, with corruption at one end, terrorism at the other, and regular robbery in the middle. Some Kenyans will feel that the conditions in which the attacks have happened have arisen because of economic growth in a vacuum of governance. Money that should have been spent on security and other aspects of national infrastructure has been disappearing for generations.

Two days ago the Kenyan Cabinet Secretary for Foreign Affairs, Amina Mohamed, responded to Mr. Foden with a denial of the charge that corruption in the country was in any way related to the failure of security forces to thwart the attack at Westgate. She reminded readers that:

The disasters of 9/11 or the more recent Boston marathon in the US and 7/7 in the UK – both highly developed countries – could hardly be blamed on corruption, so why Kenya? We do not recall Foden blaming corruption within the security agencies involved.

So what is the relationship between corruption and the likelihood of successful future terror attacks in Kenya?

There is no denying the fact that corruption is a huge soft underbelly in the Kenyan state’s fight against al-Shabaab. As I have pointed out before, the attack at Westgate  showed Kenyans that AK-47s are not a menace only in the hands of cattle rustlers or carjackers. They can also be weapons of mass murder. So reports of police reservists renting out their AKs to criminals or being paid by the same criminals to look the other way do not inspire confidence in the government’s ability to prevent future attacks. Indeed last Friday Reuters reported that:

security officers, diplomats and experts describe a security apparatus that may be squandering skills built with the help of U.S., British and other trainers because suspects can buy their way through police checks and poor inter-agency coordination means dots are not joined up.

Add to this the fact that the country has about 600,000 light weapons and small arms in civilian hands (pdf) – including 127,000 illicit guns in Turkana County alone – and you begin to get the picture of why lax law enforcement, partly fueled by lack of funds and poor training and pay of regular police, but also by higher-ups’ venal proclivities, does not bode well for the likelihood of future Westgate-style attacks.

That said, to put terrorism on the same scale as carjacking would be a mistake, especially with regard to how the Kenyan state is likely to react to future threats of terrorism in the wake of Westgate. Obviously, due to entrenched interests and the administrative power (pdf) of the Civil Service the president cannot simply wish away corruption with a stroke of a pen. But he will be under tremendous pressure from the business community (which, in my view, is his number one constituency) to make sure that things that are singularly bad for business – like Westgate-style terror attacks – do not happen in the future.

Regularized murderous banditry in the less governed spaces in Kenya or carjackings in Kileleshwa are different from terror attacks in that the former are often localized “micro-events” on the national stage (even when they are of Baragoi or Tana River or Bungoma proportions) that rarely ever have systemic effects. Westgate, on the other hand, did have a systemic effect. And in a big way. As such I expect that the government will follow the trail and start closing loopholes wherever they are that might be exploited by terrorists in the future. This includes reforming the Kenya Police Service, to the extent that is necessary. It is hard for me to imagine that the president would risk failing to secure reelection just to keep a few corrupt officials happy.

So on balance Westgate might actually lead to a major push to rid critical state institutions of the scourge of corruption and to strengthen them with a view of increasing state capacity.

I could also be totally wrong.

There is a scenario in which the response to Westgate is al-Shabaab-focused and purely driven by the military (which presently has a huge PR problem with the Kenyan public and would want to save face) and other security agencies with little input from the political class. Such an eventuality would be a double bad because of the risk of erosion of civilian control of the military in Kenya (at least at the policy level) as well as a failure to reform critical domestic institutions to reduce the likelihood of future attacks (or attempts to bring back the bad old days…)

All this to say that on the off chance that someone asks you the question in the title of this post, the simple answer would be probably.

Did we count the chickens too soon in Somalia?

May be.

First, the foreign purveyors of peace and stability involved appear to be working at cross-purposes. The US, and presumably the AU, are working for a stable Somalia. Kenya appears to be more concerned with establishing a buffer autonomous state in Jubaland with a capital in Kismayo, even at the expense of souring relations with Mogadishu (I wrote on this more than two years ago here, although my views on Jubaland have since changed). Second, the al-Shabab is regrouping, in part thanks to the activities of the same chaps that were supposed to have wiped them out. 

In August, 2011, a U.S.-backed African peacekeeping mission wrested control of the capital of Mogadishu, helping to deliver a rare respite of calm. It set the stage for the September 2012, election of a new, Western-backed President Hassan Sheikh Mohamud. Another key American ally, Kenya, last year joined forces with a Somali clan and seized control of al-Shabab’s principle stronghold, Kismayo.

But those gains are being threatened by rampant corruption within the U.S. backed government’s weak institutions, al-Shabab’s infiltration in the “highest levels” of the Somali government, and continued attacks against targets inside Somali, including a recent deadly strike on a U.N. humanitarian aid compound in Mogadishu.

Even worse, Kenyan forces in Kismayo have clashed with clans loyal to the U.S.-backed federal government while colluding with financial backers of al-Shabab in the lucrative and illicit charcoal trade, enabling the Islamist movement to refill its war chest. “The revenue that al-Shabaab currently derives from its Kismayo shareholding, its … exports and the taxation of ground transportation likely exceeds the estimated U.S. $25 million it generated in charcoal revenue when it controlled Kismayo,” the report stated.

That is Lynch over at FP in an excellent piece on the apparent increase in US involvement in the war in Somalia. 

Also, now you get the charcoal reference in my previous blog post…. Shame on the KDF, if this is true [I need a cure for denial].

Kenyan Intervention in (al-Shabab dominated) Southern Somalia

The ICG has an excellent new report on the state of the the Kenyan military intervention in Somalia.

The pressing issues raised in the report include economic, political and social concerns:

The slow pace of the military operation and the high cost of keeping troops in the field are the main reasons behind Nairobi’s desire to operate under AMISOM command. The treasury would then not have to pay the full cost of the campaign. It is estimated that Linda Nchi is costing the government at least KSh 210 million ($2.8 million) per month in personnel costs alone in a year of a record KSh 236 billion ($3.1 billion) budget deficit. If the interven- tion’s cost is not contained, already high inflation will spiral, and local discontent could become more serious…..

The intervention in Somalia is likely to have a complex impact on Kenyan Somalis’ political positions, because their attitude toward it is not straightforward. The government’s desire to establish a buffer zone between the border and the rest of Somalia privileges the Ogaden, the majority Kenyan-Somali clan. The possibility of a semi-autonomous state in the south of Somalia politically dominated by Ogaden may not be favoured by the minority, marginalised clans of north-eastern Kenya, such as the Ajuran and Degodia…..

Views within the ethnic Somali and wider Muslim community regarding the war are mixed but predominantly critical. Even those now mildly supportive could easily become hostile, especially if things go badly wrong, and civilian deaths mount. The notion that the war is popular within the Muslim community is wishful thinking, and the potential to exacerbate already worrying radicalisation in the country is very real. The police and other security services have shown some restraint in bigger cities, but there have been numerous reports of abuses in North Eastern Province.

Africa’s most forgotten Democrat

Who was the first leader of independent Africa who lost an election and agreed to step down?

No, it was not Mathieu Kerekou of Benin.

Because my adviser [I doubt he reads this blog] spent some of his early years in academia working and publishing on Somalia, I have been reminded quite a few times that back in 1967 Somalia’s president Aden Abdulle Osman Daar was actually the first leader of independent Africa to lose an election and agree to step down [see here].

This is a fact that many Africanists and journalists have forgotten. Please give credit where it is due.

Wikileaks: interesting stuff on Kenyan-Somali relations

The most interesting thing to come out of the wikileaks stuff, at least as far as eastern Africa is concerned, is the story on Kenya’s proposed strategy of dealing with the state collapse in neighboring Somalia. According to the leak, Kenyan security chiefs are considering the creation of an autonomous buffer region in Jubaland – the area of Somalia that borders Kenya – kind of like the ones in Somaliland and Puntland. The capital of the autonomous buffer region would be in Kismayu.

Kenya has a sizeable Muslim Somali population and is afraid of fundamentalist Islamism on its doorstep in a lawless Somalia. A stable buffer region in Jubaland would guard against radicalisation of Kenya’s Somali youth in the northeast, on top of checking the proliferation of small arms in the country.

Kenya also might be thinking long term. A divided Somalia guarantees less chances of success for a greater Somalia irredentist movement if peace ever descends upon the entire country.

Ethiopia is not a fun of the idea. The last thing Addis Ababa wants is an autonomous region that can fund Somali separatists in the Ogaden. The region would also have a demonstration effect on Ogadeni Ethiopians who for decades now have fought for real political and economic autonomy from Addis Ababa.

I don’t think this is a bad idea. At this point anything that would bring order to any region of Somalia is acceptable. I have argued before that the Union of Islamic Courts should have been allowed to establish order and then bought off with aid in exchange for a more sober interpretation and application of Sharia law. The whole debate about how bad they were for women’s rights was horse manure. The Saudis aren’t any better.

Regarding Ethiopia’s concerns, Meles and his men should not export their Ogadeni conflict just as much as they do not want Somali warlords to export their own civil war. The rebellions against Addis in Oromoland and the Ogaden are partly due to Zenawi’s stranglehold on power and the faux-ethnic federalism that currently exists in Ethiopia. More on this soon.