The UN Security Council last week moved to cripple anti-government fighters financially by ordering an international ban on trade in charcoal from Somalia.

Exports of charcoal from the port of Kismayu in southern Somalia generate at least $15 million a year in revenues for Al Shabaab militants, according to a report by a UN monitoring group.

Noting the military losses that African Union forces have inflicted on Shabaab, the monitoring group declared that “Al Shabaab’s greatest asset today is its economic strength.”

Somalia’s Transitional Federal Government urged the Security Council in December to prohibit the export and import of charcoal produced in Somalia. But the UN monitoring group, which describes charcoal as “Somalia’s black gold,” charged in its report last July that the transitional government is “complicit” in the charcoal trade that serves as one of Al Shabaab’s largest sources of income.

“Most commercial motor vessels transporting goods to the port of Mogadishu discharge only part of their cargo in order to deliver the remainder to [Shabaab-controlled] Kismayu and collect charcoal destined to [Arab Gulf] countries — with the full knowledge of the Mogadishu port authority,” the monitoring group said.

The manager of Mogadishu Port, Sayid Ali, had previously represented the Kenya business interests of Abukar Omar Adaani, a businessman with “historical linkages to militant Islamist groups in Somalia,” the report stated.

Many Somali traders prefer to discharge their cargo at Kismayu rather than at Mogadishu because of “the corrupt and predatory practices of the Transitional Federal Government,” the monitors added. Their report notes as an example that Mogadishu port authorities charge an import duty of $1,300 on a mid-size vessel, while the Shabaab overseers at Kismayu charge only $200.

Charcoal exports are part of a trading cycle that includes Al Shabaab imports of sugar, much of which is smuggled across the border into Kenya, the report added.

About 10,000 bags of smuggled sugar may be entering Kenya from Somalia on a daily basis, the monitors said in July.

Sugar imported as contraband from Somalia is sold in Kenya at lower prices than sugar produced in Kenya, the report found.
As of last April, a 50-kilogramme sack of Kenyan sugar was selling at Ksh4,800 to Ksh4,900 ($58-$60), while sugar smuggled from Kismayu was being sold in Garissa for Ksh4,350 to Ksh4,450 ($53-$55).

More than sugar is sometimes transported in those sacks of contraband. “The Kenyan authorities have also discovered light weapons and ammunition concealed in some sugar consignments,” the monitoring report noted.

It is not known whether Kenya’s military operation in Somalia, which commenced after the monitoring report was issued, has significantly disrupted sugar-smuggling rings.

Al Shabaab’s charcoal-sugar trade cycle “is dominated by networks of prominent Somali businessmen operating mainly between Somalia and the Gulf Co-operation Council countries, notably Dubai,” the monitors said. “Bank accounts in the Gulf States where the profits of this trade are deposited can be used to launder voluntary contributions to Al Shabaab through fraudulent invoicing, overvaluing of import proceeds and undervaluing of exports.”

Charcoal produced in southern Somalia comes mainly from acacia forests in riverine zones between the Juba and Shabelle rivers, the report said. Massive deforestation has occurred in those areas as a result. And that in turn has contributed to the food insecurity that rose to famine levels in parts of Somalia last year, UN Secretary General, Ban Ki-moon said in a report to the Security Council.