(IPG, October 2019, 61 pages)

What it is
An IPG investigation into the link between Hormuud Telecom, Somalia’s largest telecommunications company, and Al-Shabaab’s economic network in Somalia. These are the report’s claims and conclusions, not established facts.

Background
In late August 2019 Hormuud accused the Kenyan contingent of the African Union peacekeeping force (AMISOM) of destroying its masts in the Gedo region. Company officials then gained the public support of US Congresswoman Ilhan Omar. That drew attention to a 2018 UN Security Council report that named the company as a chief financier of Al-Shabaab. In early September 2019, reports accused the company of backing the destruction of 13 Safaricom masts at Jabi in Mandera, on the Kenya-Somalia border. It was also accused of providing support for the January 2019 Dusit D2 attack in Nairobi.

The report’s main argument

• Origins: It traces Hormuud’s roots and its officials’ and investors’ links to political Islam.
• “Corporate capture”: It argues that Hormuud’s entrepreneurs used Al-Shabaab’s protection to build a fortune and a near-monopoly. Al-Shabaab in turn captured the company, gaining large tax payments and access to its technology.
• Al-Shabaab’s economy: It describes the group’s funding sources, including taxation and extortion, charcoal, sugar and other trade.
• Resurgence: It links Hormuud’s finances and technology to Al-Shabaab’s recent comeback and more daring attacks.
• Hormuud caught in the middle: It says the company has also suffered attacks from Al-Shabaab over taxes and control, and has been caught in the rivalry between Al-Shabaab and Islamic State supporters in Somalia.
• Conclusion: The company’s future depends on cutting ties with Al-Shabaab and redirecting its taxes, funding and technology to the government and Somali society.

Chapters

1. They Sow the Wind (introduction)
2. A Divided Legacy: Hormuud and Political Islam
3. Corporate Capture: Entrepreneurs in Terrorist Enclaves
4. Oiling Al-Shabaab’s Economic Empire
5. Hormuud’s Assault on African Peacekeepers
6. Enter Ilhan Omar and the Tragic Tweet
7. “Reap the Whirlwind”: Resurgent Al-Shabaab
8. Hormuud and the Al-Shabaab-ISIS Rivalry
9. Conclusion: Hormuud’s Pathway to Legitimacy

Recommendations

Create regional frameworks (AU, IGAD, EAC) to stop telecom companies in areas under terrorist control from being captured.D-19 pandemic, including alternative work models, job security and prospects, impact on staffing, and tension in the workplace.

Protect legitimate businesses from Al-Shabaab taxation and extortion, and speed up training of the Somali National Army.

End double taxation by Al-Shabaab and the government, and enforce the charcoal trade ban.

Build capacity to monitor, list and sanction companies paying taxes to terrorist groups.

List Al-Shabaab as a terrorist organisation internationally and prosecute those who finance it.