Somalia:Paying taxes and supporting Al-Shabaab activities has enabled Hormuud Telecom to penetrate and set business in areas under the group's control

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Thursday November 07, 2019 - 09:15:47 in Wararka by Super Admin
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    Somalia:Paying taxes and supporting Al-Shabaab activities has enabled Hormuud Telecom to penetrate and set business in areas under the group's control

    Paying taxes and supporting Al-Shabaab activities has enabled Hormuud Telecom to penetrate and set business in areas under the group's control. In certain regions, Hormuud has enjoyed monopoly of mobile communication services under the protectio

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Paying taxes and supporting Al-Shabaab activities has enabled Hormuud Telecom to penetrate and set business in areas under the group's control. In certain regions, Hormuud has enjoyed monopoly of mobile communication services under the protection of the militant group. The expansion of their services may have contributed in revenue generating in what has been considered a negative business expansion approach
Corporate Capture: Entreprenuers in Terrorist Enclaves
Al-Shabaab has always approached communication technology with caution. This has, in turn shaped its relations with Hormuud telecom and its choice of technology adaptable to areas controlled by the terrorist group.
Figure 5: Hormuud Telecom and Al-Shabaab
In 2010, Al-Shabaab outlawed mobile banking in the territories under its control. It argued that it might channel money to the Transitional
Federal Government replaced by the current internationally recognized government of Somalia.
29 -The relations between the two deteriorated in the interlude following the entry of the Kenyan military forces into Somalia in October 2011. Al-Shabaab resorted to extreme force to get Hormuud to kowtow to its "guidelines”. This followed Al-Shabaab’s realization that most of the information provided by Hormuud, as a provider of data services to customers, was being reported back using social media.30 In January 2014, Al-Shabaab forced Hormuud and Nationlink to block internet access in central and southern Somalia.
31 -On multiple many occasions, Al-Shabaab raided and interrupted mobile phone and internet access in Somali regions. In February 2014, Al-Shabaab operatives stormed into the headquarters of Hormuud in Jilib town, arrested all the mobile phone company’s workers and threatened to kill them if they did not shut down the network and stop the data services. These attacks resulted in Hormuud employees killed, infrastructure and property destroyed and massive business losses. The company complied, shutting down all the data services in the country and incurring a heavy loss of no less than $43 million.
32 -The aim of these raids was to enforce the ban on mobile phone and internet access out of fear that the internet would aid authorities and other actors in tracking their movement and activities.
Tony Onyulo, "More phones, few banks and years of instability are transforming Somalia to a cashless society,” Quartz Africa, February 2016.
"Somalia: Al-Shabaab Shuts Down Telecom,” All Africa, December 8, 2014, Accessed September 8, 2019.
"Netizen Report: Terror Group Forces Internet Shutdowns in Somalia.” Global Voices Advocacy, January 29, 2014.
Ahmed Osman, "Somalia Powerless to Stop Al-Shabaab Mobile Internet Shutdown,” IPS News Agency, February 16, 2014, Accessed September 13, 2019.
There have been reported incidences when Al-Shabaab destroyed masts belonging to Hormuud telecom or shut down the telecom’s operations in certain areas.
33- Members of the organization also used force to demand pay estimated at $50,000 in "taxes.”
34 Hormuud employees have continued to face threats from Al-Shabaab splinter groups and other terrorist organizations such as ISIS.
Hormuud-Al Shabaab Business Alliance
Extreme violence forced even Hormuud’s most moderate entrepreneurs to comply with Al-Shabaab’s ‘guidelines’ in areas under its control.
35- This, in turn, enabled Al-Shabaab to use Hormuud services in its
Figure 6: Poaching contributes to Al-Shabaab financing
counter-intelligence operations. It has closely monitored the activities of the company especially when investigating potential spies, going through  the  phone  records  of the suspected spies to determine which calls or short messages were sent out or received.  This has enabled the group to arrest and kill thousands of people it accused of "spying”. This has led to the inevitable  conclusion  that  "Al-James Kahongeh, "Al-Shabaab destroys telecom mast in Mandera,” Daily Nation, January 20, 2018, retrieved on September 12, 2019.
Gagliardone and Nanjira, "Cyber Security and Cyber Resilience,” 2015.

 

"Netizen Report: Terror Group Forces Internet Shutdowns in Somalia.” Global Voices Advocacy, January 29, 2014.

Figure 7: Hiran Region, SomaliaReaping the Whirlwind

Shabaab has complete control over Hormuud”. As a result, moderate Somali groups have warned the public not to use Hormuud’s services because its personnel listen in on conversations on behalf of Al-Shabaab.
Hormuud has in the past been accused of disrupting telephone services during Al-Shabaab attacks against pro-Somali government forces.36 Its technology has increased the efficiency of the Al-Shabaab and its recent resurgence. Its "EVC Plus mobile money service” has supported the "efficient functioning of al-Shabaab’s financial system, allowing the group to transfer a significant percentage of its funds to its financial hub in [the] Middle Juba region without the need to physically transport the entire amount in cash across hostile territory.”
The Somali telecommunications giant has continued to provide services to Al-Shabaab. On March 30, 2018, Al-Shabaab regional head
of  finance, Mohamed Nuur, was Hiran region
killed in Hiran region following a joint operation between the Somali National Army and AMISOM. The forces recovered ledgers detailing Al-Shabaab revenues and expenses in Hiran for the period between October 2014-March 2018. The accounting system showed that the group used the EVC Plus mobile
Mohammad Tawhidi, "Ilhan Omar Calls for the Protection of a Notorious Terrorist Organization,” The Times of Israel, August 29, 2019; retrieved on September 9, 2019.
money platform provided by Hormuud Telecom to facilitate transfer of finances using cash both US dollars and the Somali shillings.37
Despite protests by its moderate investors, evidence point to Hormuud as one of the main financiers of Al-Shabaab. As one mid-level manager aptly noted, a monthly tax from Hormuud and its subsidiaries is enough to cover the salary costs of Mogadishu security forces as well as reconstruction of roads.
38 "Hormuud pays an estimated $200,000 every month to the Al-Shabaab”, said a former head of Amniyat and now a top official of Somali government intelligence agency tracking Al-Shabaab movements.
Paying taxes and supporting Al-Shabaab activities has enabled Hormuud Telecom to penetrate and set business in areas under the group’s control. In certain regions, Hormuud has enjoyed monopoly of mobile communication services under the protection of the militant group. The expansion of their services may have contributed in revenue generating in what has been considered a negative business expansion approach.
39 -But this love affair with Al-Shabaab has its downside. It has dented Hormuud’s reputation. The company operates under the guidelines provided by the Al-Shabaab, which limits its operational reach. The company runs the risk of being listed as a financier of terrorism. Further, the company risks retaliatory attacks from security forces, Al-Shabaab rival groups such as ISIS, and from other rival
"Letter dated 7 November 2018 from the Chair of the Security Council Committee pursuant to resolutions 751 (1992) and 1907 (2009) concerning Somalia and Eritrea addressed to the President of the Security Council,” UNSC, November 7, 2018; retrieved September 9, 2019.
International Policy Group interviews, Mogadishu August-September 2019.
"Telecom’s Economic Terrorism Along Kenyan Border Targeting Safaricom Plc,” SunaTimes, September 06, 2019, retrieved on September 10, 2019.
telecommunications companies competing for business space.40 Hormuud staff continue to lose their lives in the hands of the Al-Shabaab operatives following differences over taxes.
41 "KDF Killed Telecom Workers and Destroyed Communication in Gedo Region, Somalia,” Radio Banadir, July 28, 2019, retrieved on September 11, 2019.
Netizen Report: Terror Group Forces Internet Shutdowns in Somalia, Global Voices Advocacy, January 29, 2014.

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