Tag Archives: Ogaden

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

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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.

On Autocracy and Famines: The Disturbing Case of Ethiopia’s EPRDF

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VOA reports:

“Regarding the impact on economic growth, the drought-affected areas are peripheral and pastoral communities in the southern and eastern parts of the country,” Finance Minister Abdulaziz Mohammed told Reuters in an interview.

Normally, those parts of the country contribute not more than 5 percent to our GDP. On the other hand, we expect harvest to be more this year.

Abdulaziz said the government will not divert funds from other projects in its budget to deal with the drought.

“The government has immediately responded to the humanitarian crisis and so far we have been able to control the impact of the drought,” he said. “But we have not yet diverted any resource from our development projects. We have been doing it from our own reserves. We don’t expect any diversion.”

Donations offered to address crisis

Earlier this week, the United States Agency for International Development (USAID) announced a donation of $97 million for Ethiopia to help feed more than 8 million people in need of aid because of the drought.

Addis Ababa knows that America will pick up the slack. America needs the Ethiopian military’s help in fighting its enemies in the Horn. A pretty happy marriage. Screw those peripheral Ethiopians contributing less than 5% of GDP. All 8 million (or roughly one Switzerland) of them. They are only 8.5% of Ethiopia’s total population, anyway.

Plus EPRDF is so popular it has 100% of the seats in Parliament.

More on this here.

Kenyan Intervention in (al-Shabab dominated) Southern Somalia

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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.

Quick hits

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Guide to arguing on the internet (HT Lauren).

Speaking of arguing on the internet, I like the drama that is spats between economists and other academics on their respective blogs.

The Economist presents the faces of famine in the Horn. It is beyond sad that so many people should be condemned to suffer this man-made tragedy.

Brett Keller has posts here and here on Sam Childers (a.k.a. machine gun preacher), a gun-runner into the habit of doing morally and ethnically dubious things in the name of God. Keller says that Childers is “stockpiling arms at his orphanage and has admitted to selling weapons to unnamed armed factions in Sudan, Uganda, and Rwanda.”

In Zambia (where I shall be for the elections in Sept.) the politics of citizenship and belonging are yet to be settled 50 years after independence. We recently witnessed the dangers of de-legitimizing whole sections of countries as outsiders in Cote d’Ivoire. I hope that if Sata ever wins he will not do what incumbent Ivorians did to ignite a rebellion in the northern reaches of their country. For more on this check out this great book on the Ivorian collapse. I have read it and absolutely loved it.

A muddy few months ahead for the South African government. Infighting with the ANC top brass might mean an early exit for President Zuma. With over 60% of the votes in the last election, the ANC is essentially an oversize coalition prone to internal wrangles. It will be interesting to see how Zuma weathers the storm in the midst of challenges from both COSATU and Malema.

Lastly, the current issue of the Journal of African Economies looks at the impact of higher education in Africa. The main takeaway is that the low quality of education at lower levels (primary and secondary) has meant that the biggest bang for the buck on the Continent, as far as education is concerned, only comes with higher education. Too bad that many of those that get higher education are underpaid or out of the Continent all together.

Mediocre leadership is the biggest crime against humanity

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The saying goes that when the tide runs out you get to know who has been skinny dipping. In the same vein, it is when disaster strikes that you get to know who has mediocre leadership.

The ongoing famine in the Horn of Africa, the worst in 60 years, has exposed eastern African leaders for who they are. The Ethiopian and Eritrean governments for a while even refused to acknowledge the humanitarian catastrophe in their hands. The Kenyan government spokesman would not admit that any Kenyan has died from the famine. Kenya, the region’s biggest economy, is a lesson in the dangers of mediocre leadership: Meteorological warnings from two years ago were ignored; Money for food aid ended up in private bank accounts; and The government lacks any coherent agricultural and food security policies.

And because of it all, this is happening [please pardon the famine porn, but we need to see how REALLY bad things are]. 3.5 million Kenyans face starvation. 11 million in the wider region are affected.

In the last two days I have followed news stories on the situation in northern Kenya. I can only imagine how things are in the epicenter of the famine in Somalia and the Ogaden region of Ethiopia.

A lot of blame has been flying around. According to Jeff Sachs:

“The warning is also clear. The Horn of Africa is the world’s most vulnerable region, beset by extreme poverty, hunger and global climate change, notably a drying and warming of the climate during the past quarter century.”

adding that

“The west has contributed to the region’s crisis through global climate change that victimises the lives and livelihoods of the people of the region.”

In my view, however, the blame squarely lies with the region’s leadership. It is the leaders who have consistently refused to plan ahead, opting instead for palliative measures like food relief with lots of opportunity for graft. Blaming western colonialism, neocolonialism, climate change, etc are nothing but distractions. This problem and many other African problems are for the most part just that, African problems.

That millions of shillings in aid money was stolen, thus endangering millions of lives in northern Kenya, is a moral travesty. To add insult to injury, no one has yet been arrested or charged with the crime. It is Kenyan officials who have sat by and in some instances (in the past and now) even contributed to the endangerment of the lives of 3.5 million citizens of Kenya.

The usual perpetrators of crimes against humanity – warlords and their militia – kill with guns. But corrupt and mediocre civilian leadership continues to decimate millions more through both inaction and well calculated mis-allocation of resources.

Because of the famine 800,000 children in the wider region could die from malnutrition.

Food aid is definitely not a long term solution. But here is how you can chip in to help those affected by the famine.

Wikileaks: interesting stuff on Kenyan-Somali relations

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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.

keeping them honest, Aid Watch style

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For those into famines and famine politics, here’s one for you…

And more of the same

And here is more news on Ethiopia’s second insurgency waged by the Ogaden National Liberation Front (ONLF). The Oromo Liberation Front in the southern parts of the country is the other major thorn in Addis Ababa’s flesh. For a man into military victories and invasion of other states I must say I am disappointed in how Zenawi has handled both so far.

somalia: may be we should give the Islamists a try?

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Before the US decided to use Ethiopia to invade Somalia, the southern portion of the failed state – including the capital Mogadishu – was largely run by a group calling itself the Islamic Courts Union (ICU). The ICU was into strict Sharia Law, something that did not go well with most of the secular warlords (who were simply out to make a profit from the chaos that is Somalia) and most of the West (read the US). Financed to some extent by Eritrea, (to Ethiopia’s chagrin) the ICU called for a Jihad against the Ethiopian government for colluding with the infidel Americans. Ethiopia’s involvement in Somalia was partly motivated by the Islamist group’s support of the cause for the liberation of the Ogaden, a region of Ethiopia inhabited by ethnic Somalis and which has been the poster-child for irredentist dreams of Somali governments and warlords alike.

And so when the ICU seemed to be gaining too much power than the Ethiopians and Americans would have liked, a decision was made to take them out. It also emerged that the ICU was sympathetic to terrorist elements – inluding the plotters of the 1998 bombings of American embassies in Kenya (more than 200 Kenyans were killed in the attack in Nairobi) and Tanzania. Beginning in July of 2006 Ethiopian troops started moving into Somalia to take out the Islamists – and for some time they succeeded, even enabling the installation of the Somali transitional government in the sleepy town of Baidoa.

But now the Ethiopians have decided to pull out and the Islamists are back. As soon as Ethiopia withdrew, the ICU overran Baidoa and vowed to reinstate Sharia Law. This latest turn of events proves that the ICU is not a mere rag-tag group of bandits. They seem to mean serious business and perhaps it is time the international community took them seriously. Yes they have supported terrorists, but that can be changed by a stroke of a pen on a cheque book. They support the terrorists because the terrorists fund them. I am sure they can be co-opted into the global force for good in exchange for their restoration of order in Somalia.

And about Sharia Law, why should the US and the rest of the international community complain so much while it is the norm in Arabia and the gulf? What makes it different when the Somalis do it? I am all for respect for human rights and all, but I think it is imperative that global do-gooders (and all of us who believe in sensible liberalism) realize that justice is political and therefore should be pursued with regard to the particularities of the societies involved. A realistic approach to Somalia ought to allow the Islamic Courts to be if they can guarantee order and some semblance of  a state in exchange for some cash and a promise not to fund or harbour terrorists. America and Ethiopia must accept the fact that the ICU has some street credibility among Somalis. This is no time for ideological struggles. Somalis have suffered enough.