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ABSTRACT
In the past decade, terrorist attacks in Africa have increased in frequency and lethality. Cutting off funding to terrorist groups is one important way to reduce these attacks. This research focuses on Boko Haram in Nigeria and al-Shabaab in Somalia. A historical overview of terrorist financing and a current outlook of the methods used by both groups are followed by a review of the literature on countering the financing of terrorism (CFT). This provides a lens through which specific government responses to financing terrorism in Nigeria and Somalia are examined. The research found that although Nigeria has made strides toward targeting terrorist funding, it is still far from cutting Boko Haram’s revenue streams. In Somalia, a ‘failed state’, until an effective government can be put in place it seems that al-Shabaab will operate relatively unaffected. The study concludes with recommendations to improve current CFT measures in Nigeria and Somalia.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 John Campbell, ‘Justice, Terrorism, and Nairobi's Westgate Mall,’ October 9, 2020, Council for Foreign Relations, https://www.cfr.org/blog/justice-terrorism-and-nairobis-westgate-mal; Vesna Markovic, ‘Suicide Squad: Boko Haram’s Use of the Female Suicide Bomber,’ Women and Criminal Justice 29, no. 4-5: Gender and Terrorism (2019): 283–302. https://doi.org/10.1080/08974454.2019.1629153.
2 National Commission on Terrorist Attacks upon the United States, The 9/11 Commission Report: Final Report of the National Commission on Terrorist Attacks Upon the United States (New York: Norton, 2004). A majority of that money was spent in the US.
3 Vesna Markovic, ‘Financing Terrorism,’ in Capacity Building in the Fight Against Terrorism, ed. Uğur Gürbüz, NATO Science for Peace and Security Series, E: Human and Societal Dynamics, v. 112 (Amsterdam: IOS Press, 2013), 74–81.
4 ‘Managing terrorism financing risk in remittances and money transfers,’ Hearing before the Subcommittee on Terrorism and Illicit Finance, US House of Representatives, Serial No. 115-32, July 18, 2017.
5 Raffaello Pantucci and Sasha Jesperson, ‘From Boko Haram to Ansaru: The Evolution of Nigerian Jihad,’ Royal United Services Institute (RUSI) Occasional Paper (2015) https://rusi.org/sites/default/files/201504_op_from_boko_haram_to_ansaru.pdf.
6 Stephen Buchanan-Clarke and Peter Knoope, ‘The Boko Haram Insurgency: From Short Term Gains to Long Term Solutions,’ Institute for Justice and Reconciliation (2017).
7 Markovic ‘Suicide Squad,’ 283–302.
8 John Campbell, ‘Justice, Terrorism, and Nairobi's Westgate Mall,’ October 9, 2020, Council for Foreign Relations, https://www.cfr.org/blog/justice-terrorism-and-nairobis-westgate-mall.
9 Hussein Mohamed, Eric Schmitt and Mohamed Ibrahim, ‘Mogadishu Truck Bombings Are Deadliest Attack in Decades,’ The New York Times, October 15, 2017.
10 Rohan Gunaratna, ‘The post-Madrid face of Al Qaeda,’ The Washington Quarterly 27, no. 3 (2004): 91–100; and Markovic, ‘Financing Terrorism,’ 74.
11 Brendan Sozer, ‘Development of proxy relationships: a case study of the Lebanese Civil War,’ Small Wars and Insurgencies, https://doi.org/10.1080/09592318.2016.1189495; and Michael Becker, ‘When Terrorists and Target Governments Cooperate: the Case of Syria,’ Perspectives on Terrorism (2005): 95–103.
12 Daniel Byman, ‘Proxy Power: Understanding Iran’s Use of Terrorism,’ 2006. https://www.brookings.edu/opinions/proxy-power-understanding-irans-use-of-terrorism/.
13 Daniel Byman, ‘Passive sponsors of terrorism,’ Survival, Winter 2005; and Jayshree Bajoria and Eben Kaplan, ‘The ISI and Terrorism: Behind the Accusations,’ Council on Foreign Relations, May 4, 2011.
14 Michael Jonsson and Svante Cornell, ‘Kurds and pay – Examining PKK financing,’ Janes Intelligence Review, March 13, 2008.
15 Markovic, ‘Financing Terrorism,’ 76.
16 Dan Oakes, Julia Medew and Andra Jackson, ‘Pair arrested over tsunami aid sent to Tamil Tigers,’ The Age, May 2, 2007.
17 ‘The Truth about Diamonds,’ Global Witness (November, 2006).
18 Nikos Passas and Kimberly Jones, ‘Commodities and terrorist financing: Focus on Diamonds,’ European Journal on Criminal Policy and Research (2006). doi:10.1007/s10610-006-9006-3.
19 John Ashcroft, ‘Prepared Remarks of Attorney General John Ashcroft,’ Department of Justice, November 6, 2002, https://www.justice.gov/archive/ag/speeches/2002/110602newsconferenceoperationwhiteterror.htm.
20 Ashcroft, ‘Prepared Remarks of Attorney,’ 1.
21 ‘International global terrorism: It’s links with illicit drugs as illustrated by The IRA and other groups in Colombia,’ Hearing before the U.S. House of Representatives Committee on International Relations, 2002, http://commdocs.house.gov/committees/intlrel/hfa78947.000/hfa78947_0f.htm.
22 ‘Al Qaeda 'executes' British hostage in north-west Africa,’ France24, June 3, 2009.
23 Raissa Kasolowsky, and Kate Kelland, ‘AlQaeda kills British hostage in Mali,’ Reuters, June 3, 2009.
24 Kasolowsky and Kelland, ‘Al Qaeda kills,’ 1.
25 ‘The internet organized crime threat assessment (IOCTA),’ Europol, September 30, 2015.
26 Omkar Godbole, ‘February is often good for Bitcoin prices, will history repeat in 2019,’ Coin Desk, January 31, 2019.
27 Ryan Browne, ‘Bitcoin tanks 10% after Elon Musk says prices seem high,’ CNBC, February 22, 2021.
28 ‘Global disruption of three terror finance cyber-enabled campaigns,’ Press Release U.S. Department of Justice, August 13, 2020.
29 ‘Global disruption of,’ 1.
30 ‘Global disruption of,’ 1.
31 ‘Global disruption of,’ 1.
32 ‘Global disruption of,’ 1.
33 Yaya J. Fanusie and Alex Entz, ‘Boko Haram Financial Assessment,’ Center of Sanctions and Illicit Financing, Foundation for Defense of Democracies (FDD), May 2017.
34 Fanusie and Entz, ‘Boko Haram Financial Assessment,’2.
35 Fanusie and Entz, ‘Boko Haram Financial Assessment,’ 2.
36 Fanusie and Entz, ‘Boko Haram Financial Assessment,’ 3.
37 ‘Terrorist Financing in West and Central Africa,’ The Financial Action Task Force (FATF), The Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), and The Task Force on Money Laundering in Central Africa (GABAC), (2016).
38 Ronen Bergman, and David D. Kirkpatrick, ‘With Guns, Cash and Terrorism, Gulf States Vie for Power in Somalia,’ The New York Times, July 22, 2019; Katrina Manson, ‘UN pushes Gulf to cut off al-Shabaab economic lifeline in Somalia,’ The Financial Times, September 13, 2013.
39 See for example these news reports: https://dailytrust.com/kills-3-villagers-loots-livestock-near-maiduguri; https://www.vanguardngr.com/2015/12/boko-haram-attacks-village-loots-food-supplies-200-cattle-in-northeast-nigerian/; https://www.premiumtimesng.com/news/headlines/386520-boko-haram-attacks-adamawa-village-burns-houses-loots-shops.html.
40 ‘Terrorist Financing in West,’ 11.
41 ‘Nigeria's Boko Haram 'cattle markets' shut down,’ BBC, March 4, 2016.
42 ‘Terrorist Financing in West,’ 11.
43 Fanusie and Entz, ‘Boko Haram Financial Assessment,’ 3.
44 Agnes Odhiambo, ‘‘You pray for death’: Trafficking of women and girls in Nigeria,’ Human Rights Watch, August 27, 2019.
45 Stephanie Busari, ‘Several remaining missing Chibok schoolgirls escape from Boko Haram,’ CNN, Retrieved 24 February 2021.
46 Tim Cocks, ‘Nigerian Islamists got $3.15 million to free French hostages – document,’ Reuters, April 26, 2013.
47 Fanusie and Entz, ‘Boko Haram Financial Assessment,’ 3.
48 Chiaramonte, ‘Bank robbery, kidnapping,’ 1.
49 Tom Keatinge, ‘The Role of Financing in Defeating Al-Shabaab,’ The Royal United Services Institute (RUSI), December 2014.
50 An obligatory payment under Islamic law.
51 Claire Felter, Jonathan Masters, and Mohammed Aly Sergie, ‘Al-Shabaab,’ Council on Foreign Relations – Backgrounder, January 10, 2020; Keatinge, ‘The Role of Financing,’ 15; Rob Wise, ‘Al-Shabaab,’ Center for Strategic and International Studies, July 15, 2011; Mapping Militant Organizations, ‘Al-Shabaab,’ Stanford University Center for International Security and Cooperation (CISAC). Last modified January 2019. https://cisac.fsi.stanford.edu/mappingmilitants/profiles/al-shabaab.
52 Ken Menkhaus, ‘Terrorist activities in ungoverned spaces: Evidence and observations from the Horn of Africa,’ Southern Africa and International Terrorism workshop, January 2007.
53 Felter, Masters, and Sergie, ‘Al-Shabaab,’ np.
54 William Maclean, ‘Shabaab finances face squeeze after Kenya attack,’ Reuters, September 26, 2013.
55 Wise, ‘Al-Shabaab,’ 6.
56 Felter, Masters, and Sergie, ‘Al-Shabaab,’ np.
57 Keatinge, ‘The Role of Financing,’ 22.
58 Keatinge, ‘The Role of Financing,’ 21.
59 Martin Plaut, ‘After decades of UN and self-imposed isolation, Eritrea is coming in from the cold,’ Quartz Africa, November 14, 2018.
60 Mapping militant organizations, ‘al-Shabaab,’ np.
61 Keatinge, ‘The Role of Financing,’ 10.
62 Keatinge, ‘The Role of Financing,’ 11.
63 Maya Rao, ‘How did the Twin Cities become a hub for Somali immigrants?,’ Star Tribune, June 21, 2019.
64 ‘Managing terrorism financing,’ 32.
65 Allison Sherry, ‘Stalemate continues on helping Somali-Americans wire money,’ Star Tribune, February 28, 2015.
66 Mumbi Mutuko, ‘Bank Manger faces the music over helping Dusit terror attack,’ Pulse Live, Kenya, February 20, 2019.
67 Richard Munuguti, ‘City M-Pesa dealer who ‘transferred’ Sh34.7m to Dusit attackers to see a shrink,’ Nairobi News, March 1, 2019.
68 Matt Bryden and Premdeep Bahra, ‘East Africa’s Terrorist Triple Helix: The Dusit Hotel attack and the historical evolution of the Jihadi threat,’ CTC Sentinel, July, 2019.
69 Mapping Militant Organizations, ‘Al-Shabaab,’ 6.
70 Karen Ballentine and Heiko Nitzchke, ‘Beyond greed and grievance: Policy lessons from studies in the political economy of armed conflict,’ IRA Policy Report – Economic Agendas in Civil Wars (EACW), October, 2003; John Horgan and Max Taylor, ‘Playing the ‘Green Card’ – financing the Provisional IRA: Part 1,’ 1999.
71 Michael Levi, ‘Combating the financing of terrorism: A history and assessment of the control of ‘threat finance’,’ The British Journal of Criminology, May 17, 2010.
72 Many countries around the world have one or more organizations that work in the AML/CFT space. This list is by no means a complete list: International Monetary Fund (IMF), The World Bank, European Commission, Australian Transaction Reports and Analysis Centre AUSTRAC, the SA Financial Intelligence Centre, Financial Crimes Enforcement Network (FinCEN) in the US, and State Banks in many countries.
73 Mark Pieth, ‘Financing of terrorism: Following the money,’ European Journal of Law Reform, 2002.
74 Timothy Wittig, ‘Terrorist finance: Asking the right questions,’ Political Studies Association 29, no. 2 (2009): 145–53, 2009.
75 ‘AUSTRAC typologies and case studies report 2014,’ Australian Transaction Reports and Analysis Centre, 2014; ‘International standards on combating money laundering and the financing of terrorism and proliferation,’ FATF, October, 2020; and Nikos Passas and Kimberly Jones, ‘Commodities and terrorist financing: focus on diamonds,’ European Journal on Criminal Policy and Research, 2006.
76 Pieth, ‘Financing of terrorism,’ 372.
77 ‘International standards on,’ 14.
78 Levi, ‘Combating the financing,’ 651.
79 ‘International standards on,’ 14.
80 The same form is used for these various purposes: the form includes reporting on all types of suspicious activity: https://www.fdic.gov/formsdocuments/6710-06.pdf.
81 ‘International standards on,’ 16–17.
82 ‘FATF Monitoring of Terrorist Financing Risks and Actions Taken to Combat ISIL, Al-Qaeda and Affiliates Financing,’ FATF October 19, 2018.
83 ‘Global survey of the,’ 39.
84 ‘Global survey of the implementation of Security Council resolution 1373 (2001) by Member States,’ United Nations Security Council, Counter-Terrorism Committee Executive Directorate (CTED), October, 2016.
85 United Nations Security Council Resolution 1373, 2001, United Nations Security Council Counter-Terrorism Committee.
86 ‘International standards on,’ 13.
87 Richard K. Gordon, ‘Losing the war against dirty money: Rethinking global standards on preventing money laundering and terrorism financing,’ Duke Journal of Comparative and International Law, 2011.
88 Richard Barrett, ‘Preventing the financing of terrorism,’ Case Western Reserve Journal of International Law, 2012.
89 ‘International standards on,’ 24.
90 Barrett, ‘Preventing the financing,’ 735.
91 Barrett, ‘Preventing the financing,’ 735.
92 ‘International standards on,’ 25.
93 ‘The USA PATRIOT Act: Preserving Life and Liberty,’ US Department of Justice, https://www.justice.gov/archive/ll/highlights.htm.
94 ‘FATF IX Special Recommendations,’ FATF-GAFI, October 2001.
95 ‘International standards on,’ 6.
96 ‘International standards on,’ 11–31.
97 ‘International standards on,’ 7.
98 ‘Bank group strategy for the prevention of money laundering and terrorist financing in Africa,’ African Development Bank and African Development Fund, May 2007.
99 ‘AUSTRAC typologies and,’ 4.
100 ‘Bank group strategy for,’ ii.
101 ‘International standards on,’ 37–39.
102 Karen Ballentine and Heiko Nitzchke, ‘Business and armed conflict: An assessment of issues and options,’ Die Friedens-Warte, 2004.
103 Ballentine and Nitzchke, ‘Beyond greed and,’ 15.
104 Ballentine and Nitzchke, ‘Beyond greed and,’ 15.
105 Levi, ‘Combating the financing,’ 665.
106 ‘The war against money-laundering is being lost: Losing the war,’ The Economist, April 21, 2021.
107 Fanusie and Entz, ‘Boko Haram Financial Assessment,’ 1.
108 Federal Republic of Nigeria, ‘Terrorism (Prevention) (Amendment) Act’ (2013), https://ctc.gov.ng/terrorism-prevention-amendment-act-2013/.
109 Nigeria, ‘Terrorism (Prevention) (Amendment) Act,’ 9.
110 Nigeria, ‘Terrorism (Prevention) (Amendment) Act,’ 20.
111 ‘Policy Framework and National Action Plan for Preventing and Countering Violent Extremism: Partnering for Safer and Resilient Communities,’ Federal Republic of Nigeria, August, 2017.
112 ‘Policy Framework and National,’ 11.
113 ‘Policy Framework and National,’ 26.
114 ‘Anti-money laundering/combating the financing of terrorism (AML/CFT) policy and procedure manual,’ The Central Bank of Nigeria (CBN), 2018.
115 ‘Anti-money laundering,’ 8.
116 ‘Anti-money laundering,’ 25–6.
117 Nigerian Financial Intelligence Unit (NFIU), http://www.nfiu.gov.ng/.
118 Kangdim Dingji Maza, Umut Koldaş, and Sait Aksit, ‘Challenges of Combating Terrorist Financing in the Lake Chad Region: A Case of Boko Haram,’ SAGE Open, April-June 2020: 1–17.
119 Nigerian Financial Intelligence Unit (NFIU), http://www.nfiu.gov.ng/.
120 Mohammad Q. Sidq Isa, Fidelis Mac-Leva, Abdullateef Salau, Habibu Umar Aminu and Zahraddeen Yakubu, ‘Nigeria: 6 Nigerians convicted in UAE over ‘Boko Haram Funding’,’ All Africa, Daily Trust, November 9, 2020.
121 Isa, Mac-Leva, Salau, Aminu and Yakuba, ‘Nigeria: 6 Nigerians,’ 1.
122 US State Department, ‘Boko Haram and U.S. Counterterrorism Assistance to Nigeria,’ May 14, 2014.
123 US State Department, ‘Boko Haram and U.S.,’ 1.
124 ‘Country Reports on Terrorism 2019: Nigeria,’ US Department of State, June 24, 2020. https://www.state.gov/reports/country-reports-on-terrorism-2019/nigeria/.
125 ‘Country Reports on Terrorism Nigeria,’ 1.
126 ‘Country Reports on Terrorism Nigeria,’ 1.
127 ‘Supporting legal responses and criminal justice capacity to prevent and counter terrorism,’ UNODC, June 2018.
128 ‘UNODC launches new Nigeria Handbook on Counter-Terrorism Investigations,’ UNODC, November 15, 2019.
129 ‘UNODC hosts training on criminal justice responses to terrorism and the international legal framework against organized crime,’ UNODC, March 1, 2021.
130 ‘Supporting legal responses,’ 18.
131 ‘Country Reports on Terrorism 2019: Somalia,’ US Department of State, June 24, 2020. https://www.state.gov/reports/country-reports-on-terrorism-2019/somalia/.
132 Federal Republic of Somalia, ‘Anti-Money Laundering and Countering the Financing of Terrorism Act, 2016,’ https://centralbank.gov.so/wp-content/uploads/2019/06/Anti-Money-Laundering-and-Countering-the-Financing-of-Terrorism-Act-English-Version.pdf.
133 Mutuko, ‘Bank manger faces,’ 1.
134 Mutuko, ‘Bank manager faces,’ 1.
135 Munguti, ‘City M-Pesa dealer,’ 1.
136 Munguti, ‘City M-Pesa dealer,’ 1.
137 ‘AMISOM Background,’ https://amisom-au.org/amisom-background/.
138 ‘Country Reports on Terrorism Somalia, 1.
139 Middle East North Africa Region Financial Action Task Force (MENAFATF), ‘Overview,’ http://www.menafatf.org/about.
140 ‘IMF management complete the first review under the staff-monitored program with Somalia,’ International Monetary Fund (IMF), Press Release No. 19/420, November 18, 2019. It appears the review focussed mainly on debt relief rather than terrorism finance. Press reports noted that Somalia has implemented ‘key reforms’ and has had satisfactory performance, but provide no specific details. See https://www.imf.org/en/News/Articles/2019/11/15/pr19420-somalia-imf-management-complete-the-1st-review-under-the-staffmonitored-program.
141 Olubusola Oyeyosola Diya and Oshokha Ilegogie, ‘Nigeria: In the Face Of Expulsion from the Egmont Group,’ Mondaq, March 15, 2018.
142 Markovic, ‘Suicide Squad: Boko Haram’s,’ 17.
143 Maza, Koldaş, and Aksit, ‘Challenges of Combatting Terrorist,’ 9.
144 Keatinge, ‘The Role of Financing,’ 27.
145 Keatinge, ‘The Role of Financing,’ 27.
146 Abdi Guled, ‘Truck bomb in Somali capital kills at least 79 at rush hour,’ ABC News, December 28, 2019.
147 Sunguta West, ‘Al-Shabaab Attacks Spike, as COVID-19 Grips the World,’ Terrorism Monitor, Volume 18 Issue 15, July 28, 2020.
Additional information
Notes on contributors
Vesna Markovic
Dr Vesna Markovic holds a BA and MA from the University of Illinois at Chicago, and a PhD from Sam Houston State University. She spent numerous years working for the Institute for the Study of Violent Groups, and is now associate professor and chair of the Justice, Law and Public Safety Studies Department at Lewis University in Romeoville, Illinois, United States.