Counterterrorist Financing Strategies: The Case of Sub-Saharan Africa

By Alfio Cerami posted 09-19-2016 09:58

  

Counterterrorist Financing Strategies: The Case of Sub-Saharan Africa

In order to fight the growth of Islamic terrorism, developing an effective counterterrorist financing strategy is vital. Taking Sub-Saharan Africa as a case study, this article discusses the main antiterrorist financing challenges that this part of the world currently faces, with associated chances for democratic stabilization. The same counterterrorist financing framework can be applied to other regions of the world as well.

Terrorist activities require money. Jihadists must have funds at disposal to recruit personnel, to carry out bombings and killings, and to buy legitimacy from the population. ISIS financing activities – in particular, those related to protective, extractive and redistributive activities – are functional to the establishment of a state (see Charles Tilly’s seminal work on War Making as State Making) and they represent an important starting point of analysis to tackle the expansion of ex al-Qaeda branches in Sub-Saharan Africa and elsewhere.

In a recent article in the Washington Post, Ana Swanson has identified twelve ways ISIS gets funding in Iraq. These include: 1) oil; 2) taxation and extortion; 3) kidnapping for ransom; 4) wealthy donors; 5) sales of antiquities; 6) Iraqi banks; 7) sales of other looted property; 8) real estate; 9) foreign fighters; 10) agriculture; 11) phosphate, cement and sulphure; and 12) human trafficking.

These sources of funding apply, to a large extent, also to the case of terrorist financing in Sub-Saharan Africa, though some adaptations and additions are required. Without the possibility of discussing all sources of funding a terrorist organization, like ISIS abroad, below I sketch twenty key elements necessary to establish a long-term counterterrorist financing strategy.

1) Tackling the acquisition and redistribution of natural resources. Whilst ISIS in Iraq succeeds to acquire most of its funding through the acquisition and sale of oil, gas, phosphate, cement and sulphure, in Sub-Saharan Africa, other revenues obtained from the extraction of natural resources must be taken into account. These involve, for example, oil and gas, as in Gabon, Kenya, Niger, and Nigeria, but also the trade of diamonds as in Botswana and South Africa, of gold in Mali and Ivory Cost, or uranium in Mauritania, just to quote a few.

2) Blocking taxation and extortion. Several countries in Sub-Saharan Africa are subjected to permanent civil conflicts and wars which make the passage from one zone to another an extremely lucrative business. This source of funding applies in a particular manner to those rebel and terrorist groups who control an area subjected to disputes. These are the cases of al-Qaeda in the Islamic Maghreb (AQIM) in northern Mali, or other ISIS affiliated terrorist groups (such as Boko Haram in Nigeria, the Movement for Oneness and Jihad in West Africa (MUJAO), the National Movement for the Liberation of Azawad (MNLA), and Ansar Eddine in Mali and Niger, Al-Shabaab in Somalia and Kenya), that, form time to time, cross the border in Benin, Burkina Faso, Chad, Kenya, Niger, Nigeria, Somalia, Sudan, and South Sudan.

3) Blocking kidnapping for ransom, as well as the payments for the release of hostages. Kidnapping is, unquestionably, an extremely profitable source of funding since the times of the Saddam regime. Recently, it has witnessed a revival of interest by AQMI in Mali and Mauritania, as well as by Boko Haram in Nigeria, and al-Shabaab in Somalia and Kenya. This also applies to other affiliated groups present in Benin, Burkina Faso and Niger. It has, for example, been estimated that kidnapping a single person from the west can be worth between 1 and 6 million USD. Terrorists have acquired, in this way, sufficient funds to buy weapons and other explosive material with which they can conduct their criminal activities.

4) Pursuing wealthy donors from Sub-Saharan Africa, United States, Europe and the Middle East and North African (MENA) region. As it is well known, funding from wealthy donors is essential to improve the chances for the socio-economic development of the continent. They represent among the most important sources of Foreign Direct Investments (FDIs), but they may also represent important funds for individuals close to terrorist organizations. Money from wealthy donors can take several forms. They range from donations or investments for creating an enterprise to money transfers from one company to another or for the construction of buildings. Charitable donations are also used to ensure the subsistence and activities of inviduals linked to the terrorist organization.

5) Tracking sales of antiquities. For Al-Shabaab in Somalia and Boko Haram in Nigeria, education and culture represent a ‘sin’, when they do not conform to a strict understanding of the Coran. Surprisingly, however, the trade of stolen antiquities estimated in 100 million USD a year is not considered as such by ISIS terrorists in Iraq and Syria, as well as by their affiliated branches in Northern Mali, Niger, Nigeria and Somalia. As part of a larger jihadist strategy, this sale has not rarely be addressed as a necessary precondition for terrorist development.

6) Tracking the acquisition of banks assets, cross-national bank transfers and off-shore assets is crucial not only to fight ISIS in the MENA region, a zone particularly subjected to financing from Saudi Arabia, but also in Sub-Saharan Africa. In this latter case, the acquisition of bank assets involves not only robbery or, more or less, legal bank and bank assets acquisitions, but also cross-national bank transfers and off-shore assets whose amounts and sources of funding are difficult to identify. This also applies to micro-lending institutions with their deposits. Though the importance of bank assets and micro-credit for poverty reduction and human development must not be forgotten, these institutions and assets can also represent an important source of funding a terrorist organization, laundering the money of unsuspected investors and beneficiaries. This money can then be reinvested in terrorist activities. This is particularly true in the case of the Ivory Coast, Kenya, Mali, Nigeria, Senegal, Somalia and Sudan.

7) Tackling lllicit Trade. For the members of ISIS active across the Sahara, trade of stolen vehicles has become a key source of funding, where vehicles coming from Western Europe can easily be re-immatriculated in several countries of Sub-Saharan Africa. By so doing, several terrorists have enlarged their activities, engaging in transborder trafficking. Benin, Chad, Mali, Ivory Coast, Kenya, Mauritania, Niger, Nigeria, Somalia, Sudan, South Sudan and Tanzania. Smuggling activities have also involved cigarettes through the Sahara to Europe, as well as the trade of stolen weapons and ammunitions. The latter should, however, be regarded as a different business segment than the one related to buying and selling weapons in the international market or from allied African or other countries. There is, in this case, a convergence of licit and illicit systems of trade (see The Sentry Project). Country specific warlords play here a key role. Similar considerations apply to drug trafficking (especially cocaine and heroin), though the main transiton routes change. At current date, they range from Afghanistan to Djibuti and Somalia in the case of heroin; from Nigeria to Europe in the case of cocaine, ecstasy and marjiuana, as well as from Senegal and Morocco to Spain in the case, respectively, of marijuana and hashish. International routes also involve drug trafficking from Latin America through West and East Africa to Europe.

8) Blocking the acquisition of real estates. Buying real estates is an additional profitable business for terrorist organizations. Trading in real estates ensures the availability of shelter for terrorists. Through rents and sales of apartments in the major tourist cities of Sub-Saharan Africa (eg. in Kenya, Tanzania, Senegal, Ivory Coast and so on), the budget of the terrorist organization is increased, but so are the funds at disposal for its single members. Illicit funding can, in this way, be covered and money deriving from other illicit activities laundered. This also includes revenues deriving from the creation of business activities (such as small shops) and, subsequent, transfers of money to individuals belonging to the organization.

9) Tracking transnational remittances through mobile phone transfers and money transfer shops is also necessary. Here, it should be remembered that tracking does not mean blocking. Economic remittances from richer countries represent an unreplaceble source of survival for the poorest population of the continent. Recent estimations have shown, for example, that in Sub-Saharan Africa remittances correspond to 20 billion US dollars a year and with an increasing trend (see Cerami 2013, p. 106). Whilst most of these funds is necessary for the survival of the beneficiary, it should also not be forgotten that they could be used, as in the cases of Kenya, Nigeria, Mali, Somalia and South Sudan, to finance a terrorist organization. Similar considerations apply for other social networking fundraising activities, such as crowdfunding, online charitable campaigns and mobile-to-mobile transfers.

10) Blocking the distribution of social services by terrorist organizations, whilst favoring their institutional reconversion. It has been documented several times that ISIS in Iraq has begun to provide a wide range of social services to the population under its control, favoring the acceptance of the organization in the host community and obtaining, in this manner, political legitimacy (see Cerami forthcoming1). Similarly to their counterparts in Iraq and Syria, Islamic terrorists in Sub-Saharan Africa have learnt this lesson. They have started to provide a wide range of social services in places and in communities where no formal system of social security exists. This is, for example, the case of AQIM in Mali, Al-Shabaab in Somalia and Boko Haram in Nigeria. Favoring an institutional reconversion of informal social services becomes, in this case, an important functional counterterroristic tactic. By so doing, loyalty to the terrorist group can be reduced, whilst the trust of citizens in the political regime increased. Good governance mechanisms become of vital importance to avoid that cooptation of citizens translate into an open support to autocratic regimes.

11) Blocking the reconstruction of infrastructures by terrorist groups, whilst favoring their institutional reconversion. As several studies have shown, in Iraq, ISIS is taking care of infrastructural reconstruction (for a review, see Cerami forthcoming). Several projects left unprotected by the local authorities because of the risk of attacks and explosions have been lost, ultimately, damaging the population. Whilst leaving important infrastructures in the hands of local communities may, at first glance, seem a good strategy to ensure basic services (such as hospitals) to the population in need, the risk of terrorist infiltration and abuse of infrastructures remain. An additional unintended consequence is, in this case, the acquisition of political legitimacy by the terrorist organization. This happens, for example, in Mali, Nigeria and Somalia.

12) Blocking hard currencies from foreign fighters. Foreign fighters travel, but they do not it alone. They travel with their wallet that are often full of cash in hard currencies. Though douanes controls exist, full wallets usually allow a preferential access to the exit. Controlling international hard currencies flows in international airports and in proximity of a country border becomes, in this case, crucial. This also applies to the case of cash couriers, not excluding women cash couriers, in remote zones, where border control is in the hands of police authorities. Equally important is, therefore, tackling police corruption, as well as the locks that can accidently be present in the douane cabines, as well as in remote zones.

13) Controlling agricultural and fishery sales. Most countries in Sub-Saharan Africa can be defined as subsistence economies that rely either on subsistence agriculture or on fishery. Acquiring access to the production and distribution of agricultural and fishery products becomes one of the most lucrative methods at disposal to jihadists. They are able to provide, on the one hand, subsistence to their members, whilst, on the other, they obtain the sympathies of the population under their control through reduced prices. Ensuring the presence of additional goods that can be exchanged in local markets, where informal practices of trade are common and informal workers are preponderant, represent for jihadists an important source of survival and an unexpected source of community protection.

14) Stopping human trafficking. In ISIS dominated territories, human trafficking involves not only exorbitant money from international migration, but also prostitution, and child trafficking for labor or soldiering. It also includes the trade of passports, forced marriages, surrogate mothers and unlawful children adoption. Recently, ISIS religious leaders have expressively addressed trafficking in young women for sex and marriages (or for both of them) a powerful jihadist strategy and vital for ISIS nation-building strategies. Similar considerations apply to the case of terrorist recruitment in Sub-Saharan Africa, though such coupling activities still face the resistance of some chefs of the village and religious leaders. The presence of multi-wives (and presumably of multi-mother-in-law families) in Sub-Saharan Africa would, in fact, make the terrorist organization a primarily female-based endeavor. It would represent, according to experts, a break with the formal dictates of the Coran, as well as a threat to the establishment of peaceful relations in the community.

15) Fighting political and administrative corruption, as well as fighting the involuntary or voluntary redistribution of funds between politicians and terrorists is an additional crucial element to take into account when attempting to introduce an effective counterterrorist financing strategy. Cooptation of citizens and business leaders is a well known mechanism used by political elites in Sub-Saharan Africa to acquire political loyalty and social peace through the establishment of particular detrimental do ut des political and business relations. Corruptive mechanisms are, in this way, easily institutionalized, mutating their informal to a formal character. Countries in Sub-Saharan Africa where these practices are preponderant include Benin, Burkina Faso, Chad, Djibuti, Ethiopia, Ivory Coast, Kenya, Mali, Nigeria, Niger, Somalia, Sudan and South Sudan, to quote only a few.

16) Controlling the redistribution activities and funds provided to the ‘chefs of the village’ is here another determinant endeavor. Discretionary practices of the chefs of the village in terrorist controlled territories often translate in the enforcement of pro-terrorist clientelistic relations. This has been the case of ISIS dominated territories in Syria and Iraq. But it is also the case of warlords in Rwanda, Congo, the Democratic Republic of Congo, Somalia, Sudan and South Sudan and, with regard to oil redistribution, in Nigeria, in the Delta of Niger and in Ivory Coast.

17) Blocking blackmailing activities and so-called ‘gratitude money’ for accessing jobs. In many countries of Sub-Saharan Africa (but not only), obtaining a job is a matter of life and death. An informal rule has therefore been introduced in several countries. Before having the privilege to engage in any work activity some kind of reward to the job donor must, in some way, be granted. When formal job agencies do not exist, finding a job in the main squares of the country, as in Abidjan in Ivory Coast or in Nouakchott in Mauritania, remains, in fact, the only possible solution (see Cerami 2013). This lack of formal protection leaves, however, the occasional job seekers not only subjected to the job donor’s malpractices, but also particularly vulnerable to terrorist affiliation. This also applies to begging, though such fundraising activity is not easy to control, since the passage of money from one individual to another is difficult to track.

18) Tracking the revenues of special religious endowments: the waqf and zakat. Waqf refers to the religious endowments and assets that are in the hands of religious establishments and that are, in principle, used for public benefits. All Muslim countries have ministries of waqf. Revenues and donations from the waqf have, subsequently, been used to develop a peculiar system of social protection, that succeeded in ensuring loyalty to the dominant religious, political and moral order. The zakat, instead is a 2.5 per cent tax on assets paid by the members of the community (often the richest members). According to Jawad and Yakut-Cakar (2010, p. 665), it has historically played important role in income redistribution and socio-economic development objectives, and it is based on the notion of community solidarity (for a detailed description, see Cerami 2015). As it can be imagined, money raised through these channels are difficult to control and may be used to finance, in extremely subtle and shadow ways, members of local communities close to terrorists or terrorist organizations. These considerations apply to all Muslim dominated countries in Sub-Saharan Africa, though the revenues of both social taxes are lower, with the amount that primarily depends on wealthy donors.

19) Tracking NGOs and faith-based organizations redistributive activities. Several studies have, in fact, emphasized the important role of faith-based organizations in the Middle East and North Africa region. This was clearly the case of the Sunni Muslim Future Movement and the Shiite Muslim Hezbollah in Lebanon, the Dar Al Aytam (Muslim Sunni) and Emdad (Muslim Shi’a – affiliated to Hezbollah) in Lebanon, the Jami’yyat Da’wa Islamiya in Libya, the Muslim Brotherhood in Egypt and in Jordan, the Caritas in Egypt, Jordan, Lebanon and Palestine, or the International Islamic Relief Organization in Saudi Arabia, the Human (see Cammett and McLean 2014; for a detailed discussion see Cerami 2015). Similar considerations apply in the case of Sub-Saharan Africa, though the involvement of Christian faith-based organizations should also be considered. Charity, religious and not-for-profit organizations can, in fact, help members of a community to survive extremely difficult times, but can also represent important sources of funding and shelter for terrorists. They can provide them with subsistence, offering them shelter, facilitating their travel abroad through protected false identities.

20) Last but not least, tracking how cash transfers from international organizations are used is essential. In Sub-Saharan Africa, international organizations, such and the IMF and the World Bank, regularly sponsor projects that aim at providing conditional or unconditional cash transfers to particular segments of the population in need. Though cash transfers are usually modest, the global sums invested by these two banks are extremely important and often made available to politicians and chefs of the village, who benefit, in not rare cases, the closest members of an ethnic group. Almost all countries in Sub-Saharan Africa obtain such funding, though the control of transfers is not in the hands of World Bank or IMF fund managers. The management of these funds must, therefore, also be carefully monitored, since they could be used for political and religious cooptation.

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1 Cerami, Alfio (forthcoming), Rebuilding Economics and the Stabilization of Iraq.

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