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Terrorism & The Charcoal Trade in Somalia

Updated: Jul 26, 2021

Terrorism & The Charcoal Trade in Somalia

In Somalia, the illegal charcoal trade is not only a cause of deforestation, environmental degradation, and communal conflict but also provides steady funding for criminal and terrorist groups such as Al Shabaab, who control much of the distribution network businesses involved in the trade.

Al Shabaab’s activities in the illegal charcoal trade have allowed this business to thrive which has led to the indiscriminate cutting of trees. The result is a highly negative impact on Somalia’s fragile ecosystem. The huge demand from the Arab Gulf States has made this industry very profitable although unsustainable in the long run. Almost all of the Somali charcoal which is made from acacia trees ends up in Gulf states.

The focal point of illegal charcoal trade is the port city of Kismayo since control of the port means also controlling major trade routes some of which run from the Arabian Peninsula to all of East Africa and beyond.

The illegal exportation of charcoal from Somalia is currently considered Al-Shabaab’s main source of revenue. This article will describe the corrupt business practices between Gulf-based businessmen, Somali administrations and Al-Shabaab.

The Smuggling Network

Sources have revealed that Gulf-based businessmen and Al-Shabaab are benefitting from the trade in illegal charcoal that is worth millions of dollars, in meantime Al-Shabaab’s current lack of port access in Southern Somalia makes smuggling and taxing shipments more difficult, though corruption within the African Union Mission in Somalia (AMISOM) which is controlling southern Somali ports along with elements of the Jubaland government administration has allowed Al-Shabaab’s activities to continue.

Local workers at the port in Kismayo informed us that the export of charcoal – the backbone of revenue for al-Shabaab, Jubaland and many Gulf-based businessmen – continues in spite of being banned by the UN security council.

Local workers at the port and journalists in Kismayo told us the port tax on illegally exported charcoal is around $3 a bag, split three ways between the Jubaland administration, Gulf businessmen and Al-Shabaab. Until recently, the export volume was around 1 million bags a month equaling revenue of $24 million a year. Al-Shabaab also taxes charcoal production before the bags reach the port and it has a stake in the market value of the cargo when it reaches its destinations in the Middle East.

The UN has documented numerous instances in its yearly reports of individuals smuggling Somali charcoal, with some key unsanctioned individuals flagged in consecutive years. The authorities in the Arab Gulf countries are aware of the criminal networks and of the illegal charcoal shipments. To circumvent the port authorities in the Arab Gulf countries the smugglers use fake paperwork declaring the charcoal shipment legal (of non-Somali origin) and when required, bribes.

These individuals and businesses involved in the illegal charcoal trade are providing a lifeline to Al-Shabaab by violating the UN’s 2012 ban on exporting Somali charcoal. This continued trade allows Al-Shabaab to tax charcoal shipments and engage in money laundering.

The businessmen at the center of the charcoal trade include Basheer Khalif Moosa (aka. Bashir Khalif Musse) a Djiboutian national residing in Dubai, who was repeatedly identified by the UN in its yearly reports for the last 3 years. Also, Ali Ahmed Naaji, a former government worker of the Jubaland administration who for many years has been one of the key players in Somali charcoal smuggling. Both of these individuals have close ties with the President of Jubaland, Ahmed Modabe as well as Al-Shabaab.

The charcoal market is controlled by a small number of professional traders, who are based in Kismayo and these individuals act as brokers for larger traders based mainly in the United Arab Emirates. All the Somalia-Dubai based traders deal with al-Shabaab in one way or another, and some are representatives of the terrorist group.

Multiple confirmed reports have indicated that the company “All Star Group” coordinates with the suppliers of illegal Somali charcoal, traffickers, and Al-Shabaab. The head of the company, Basheer Khalif Moosa, conducts his illegal operations through the business also named “All Star General Trading Company”, that works with suppliers, traffickers, and investors in Kismayo and Dubai.

The below written contract confirms that a long-time associates of the President of Jubaland, Ahmed Modabe are currently board members of the “All Star Group” including a former Al-Shabaab tax collector, Ali Ahmed Naaji. The contract letter indicates that apart from Basheer Khalif Moosa and Ali Ahmed Naaji there are 6 other businessmen who mostly are based in Dubai working with “All Star Group”.

Our investigators were informed by reliable sources that “All Star Group” and the Jubaland administration have a monthly agreement which facilitates payments of $750,000 to the Jubaland President, Ahmed Madobe, while Al-Shabaab receives $350,000.

Commercial dhows are used to smuggle the charcoal from Kismayo to the Arab Gulf countries. The dhows first pass through Iran to change the charcoal bags with Iranian stamped bags in order to convince the customs authorities in UAE or other nations that the charcoal is from a legitimate source. On their return journeys, the dhows bring guns and drugs from Iran and Yemen intended for terrorist organizations like ISI Deash in the Bari region of Puntland in the North and Al-Shabaab in the South of Somalia.

Most of Al-Shabaab’s income comes from illicit taxing and extortion, the illicit charcoal trade and the taxation of traffic moving through checkpoints within their controlled areas. Al-Shabaab has maintained its strongholds in southern Somalia despite losing control of Kismayo. They have compensated for this by striking mutually beneficial financial agreements with elements of the Jubaland administration.

The UN estimates that Al-Shabaab earns at least $10 million a year from the illicit charcoal trade smuggling. Al-Shabaab is reported to be the main actor actively involved in the charcoal production business, also other illegally armed groups profit from large-scale charcoal production. The UN estimates the Somali charcoal trade is worth 120 million dollars annually.

It’s significant to understand that the Somali charcoal trade illustrates the complexity of the conflict in Somalia. Income from charcoal trade provides important financing for warlords and terrorists which enables them to maintain their control on vast areas of the country.

While Al Shabaab and other armed groups benefit from charcoal trade, it’s the more powerful and corrupt businessmen that are the real power behind the industry, these businessmen are the real threat to peace and stability in Somalia.

This report was written in 2018 by investigators from The Center for Security & Political Strategic Studies. CSPSS is a Somali think tank who’s goal is to expose the activities of criminal and terrorists groups within Somali and help to promote stability and economic progress for Somalia.

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