Revealed: Source of Boko Haram’s income

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This article was coiled from aoav

Self-funding

It is very difficult to identify only a few dominant characteristics in Boko Haram’s funding. Rather, the group has a highly diversified financing strategy, where seemingly opportunistic and almost ad hoc operations that generate small amounts seem to be their dominant source of revenue. The group essentially has the ability to ‘live off the land’, which is enough to run their low-cost insurgency that is dependent on quite simple weaponry, demonstrated primarily by their aforementioned usage of small IEDs. Northern Nigeria is a region where more than two-thirds of the population lives on less than $1 per day, meaning that Boko Haram does not need large funds to support themselves.

Indeed, observers have put their annual income at $10 million, which is significantly lower than other organisations. However, it would be wrong and dangerous to see the group simply as an opportunistic thug gang, as they have demonstrated a sophisticated ability to remain off the radar and have been weary of forming long-term financial relationships with other groups. The small bounty approach may be less rewarding, but also lends itself to black market and untraceable dealings that provides a more secure flow of funds coming into the organisation. This also seems to be a strategy born out of necessity, as foreign funding has dwindled since 2011 and reliance on robberies and extortion has increased.

Their ability to stay off the radar has been attributed to Nigeria’s docile financial environment. Godwin Emefiele, the Governor of the Central Bank of Nigeria (CBN), and Francis Usani, Director of the Nigerian Financial Intelligence Unit (NFIU), have both identified this as a factor that facilitates Boko Haram funding. For example, Boko Haram has been known to use fraudulent identities and documentation to open and run bank accounts, as well as paying off bank employees to cover up their activities.

Means of money transfer

Much of Boko Haram’s funds are transported through human cash couriers, which are able to move rather easily between the porous borders of Nigeria, Niger, Cameroon and Chad. US intelligence officials have noted the sophistication by which Boko Haram has avoided Nigerian financial regulation, which is partly a result of their hard-to-track usage of human cash couriers. The group reportedly regularly uses women as cash couriers, given that Muslim security personnel at checkpoints in northern Nigeria would not, under religious restrictions, make physical contact with them. Cash couriers are often tapped with transporting other important items, such as messages or letters between leaders and commanders. For example, in June 2012 a Boko Haram cash courier was apprehended on the border between Nigeria and Niger with a letter from AQIM leader Abdelmalek Droukdel and Abubakar Shekau, suggesting the importance of these couriers to Boko Haram’s communications and external infrastructure. Boko Haram also uses the hawala money transfer system to send funds, although not much detail is known about their usage of the service

Taxation and extortion

Like many other terrorist groups, Boko Haram uses taxation and extortion in territories they control as a reliable source of income. In 2015, it was estimated that around five million people lived under Boko Haram control, and that between 25-75% of households in this area were taxed. Although the UN stated in September 2016 that the number of people under Boko Haram control in Nigeria was two million (adding some areas in Cameroon, Niger, and Chad), the group still holds enough territory to collect significant revenue from taxation. Not much is known about Boko Haram’s taxation policies. What is known is that they usually levy taxes on goods passing through areas under their control. One noted case is the trade between Boko Haram and fishermen and herders in Niger. Before Niger banned this trade as part of a state of emergency introduced in February 2015, Boko Haram was able to openly trade in fish, cattle and other products across the border. However, although the ban imposes some challenges on the trade, testimonies from herders and fishermen in the region suggest that Boko Haram still operates checkpoints at which they tax products coming through.

Something which has not been reported is that Boko Haram has, as one result of their collaboration with IS, been able to start taxing migrants in Niger and Libya. This is in turn done through connections with local clan leaders or smugglers who control desert routes, and seems to be a lucrative upside to the otherwise unstable relationship with IS.[i]

Boko Haram has also been known to impose jizya, a tax on non-Muslims, in the areas they control. Although not much is known to what extent this practice is imposed, the group has on several occasions killed people under its control who have refused to pay their religious tax. A group of 20 Christians in the northeastern Nigerian village of Kamuya had allegedly been warned about their outstanding tax before they were killed. This extortive element spans into protection money from local business as well. A fighter arrested by Nigerian security forces in 2012 admitted that Boko Haram used both negotiation and intimidation in order to demand protection money, even having succeeded in getting state institutions to provide ‘donations’ to the group. These reports were corroborated by bank accounts shown to Nigerian security forces, and the money was spent on small operations, including IED attacks.

Kidnappings and people smuggling

Kidnapping could perhaps be said to be Boko Haram’s largest source of revenue, and the group is believed to have collected more than $10 million over the past several years. It has been documented that Boko Haram between 2010 and 2012 received funds from AQIM for the purpose of conducting kidnappings and to later divide the release money, a practice which does not occur today.[ii]

The group is said to demand $1 million for the wealthy Nigerians they kidnap, and were able to reap as much as $3 million for the release of a French family that they abducted outside the northern Cameroonian city of Amchide in February 2013. In that particular case, the Cameroonian government also released Boko Haram members from prison, demonstrating how conducive kidnappings may be to their cause. The group also has a special kidnapping squad that plans and executes kidnappings of high-profile businessmen, politicians and other influential people.

However, most victims of Boko Haram kidnappings are mid-level Nigerian officials, who are not wealthy enough to have a security detail, but can afford to pay sums ranging up to $10,000, which thus make them both a lucrative and easy target. Boko Haram also kidnaps people with less financial capacity. Despite not being able to pay large sums of money, they are easy to abduct and can provide sums that can keep Boko Haram operations going. For example, a Nigerien official stated that Boko Haram in early 2015 kidnapped a Nigerien farmer’s three children outside of Diffa in southern Niger, demanding $4,000 for their release. The farmer allegedly emptied his bank accounts and sold all of his cattle to get his children back, leaving the family with no other means of income.

The most infamous case of Boko Haram kidnapping is the so-called Chibok girls case, where Boko Haram on the night of 14 April 2014 abducted 276 female students from a state school in Chibok in Borno State. Boko Haram leader Abubakar Shekau later claimed that he would sell them as slaves. Although this is the most documented case, Boko Haram conducts these abductions on a regular basis with the intention of selling women and other people they kidnap off as slaves. One ‘slave’ may cost as little as $12, and Boko Haram usually uses social media such as Whatsapp or Facebook to arrange transactions or even advertise the people they sell.

Raids and robberies

Boko Haram partially finances their operations through bank robberies and raids of villages. The group has robbed hundreds of banks in Borno state and the surrounding areas, a practice which they justify by calling the money ‘spoils of war’, which, according to the group at least, makes it permissible under Koranic law.

Village raids have also become a trademark for the group, and these are often violent and deadly. In 2014, Boko Haram raided over 40 villages, an atrocity that left 2,000 casualties. In 2015, at least 35 such attacks were recorded, leaving at least 870 people dead. One example is the Kukawa massacre between 1-2 July 2015, where Boko Haram burned mosques due to them preaching a ‘too moderate’ version of Islam and killed 118 people. The testimony of Kabiru Abubakar Dikko Umar, believed to have masterminded the Christmas Day attack in Madalla in 2015, revealed that the loot from robberies was shared between five groups within the organisation. Namely: the less privileged; widows of soldiers; zakat (alms giving); those who brought in the money; and, finally, to the leadership.[iii]

Smuggling of arms and goods

Smuggling is also an area in which Boko Haram seems to act opportunistically. According to various reports, Boko Haram smuggles petrol, cattle, livestock, ivory, cigarettes, arms and drugs through northern Nigeria on a regular basis. The group has been pointed out as a major player in drug smuggling, although such reports are probably overstated. Boko Haram has dealings with drug smugglers, but it usually occurs as a result of the fact that they tax the drugs as they would any other product coming through their area of control. There have, however, been reports of Boko Haram acting as a middle-man in the drug trade between Latin America and Europe, where Nigeria is believed to be a transit hub.

Furthermore, Indian media has reported that Boko Haram has teamed up with the Mumbai criminal syndicate known as ‘D-Gang’, led by Dawood Ibrahim. Abubakar Shekau and Ibrahim reportedly met in Nigeria to set up an arrangement in which Boko Haram fighters would help D-Gang export drugs to India. Moreover, former Malian Defence Minister and Minister of Foreign Affairs Soumeylou Boubèye Maïga has stated that Boko Haram controls some of the $800 million per year cigarette smuggling routes that run through the Sahel, although it is likely that their share is rather small compared to groups such as AQIM, al-Mourabitoun and Ansar Dine.

It is certain that Boko Haram partakes in such trades, but it is probably exaggerated to suggest that the group controls entire smuggling routes. According to confessions made by arrested Boko Haram arms smugglers, proceeds from arms sales are often donated to Boko Haram, and arms are delivered to the group free of charge. One arms smuggler said that weaponry on several occasions had been sent from ‘other terrorist organisations’, most likely AQIM. The chaos in Libya has further facilitated the transfer of arms into Nigeria, something which Boko Haram is believed to have taken advantage of through their connections with IS.

A confession from an apprehended Boko Haram fighter in 2013, further confirmed that the group regularly purchases or steals goods that are sent to members in other locations, where they are sold at inflated prices. Nigerian media has placed Boko Haram’s recent shift towards trading stolen cattle within this larger scheme. According to Nigerian analysts, the group has resorted to this strategy due to their impaired capacity to attack and rob banks, focusing instead on smaller but more easily obtainable income streams.

Collections and begging

One arrested member of Boko Haram, who was identified as a treasurer for the group, revealed that he was in possession of both mandatory and voluntary donations from the group’s members. The unnamed treasurer stated that members of Boko Haram often make voluntary donations of less than $1, but are also expected in their roles as members to make donations to the organisation. In fact, during Muhammad Yusuf’s time as leader, members were obliged to pay a daily levy of 100 naira ($0.30) to the organisation, and this formed the foundation of the group’s finances in its early stages.[iv]

Other confessions have revealed that Boko Haram uses children, elderly and the mentally impaired in order to appeal for funds from the public. These people are used as beggars, positioned in strategic locations in towns and cities. The beggars also function as spies, according to the confession. Nigerian officials have also insinuated that they suspect Boko Haram of using beggars for the purpose of luring people into IED attacks, for example by running through villages shouting ‘Boko Haram’ and creating panic and consequently driving people into selected detonation points.

External funding

Foreign donors

Boko Haram has, like most other terror groups, been pointed out as a group that receives funds from foreign and particularly Gulf donors. One case that would support such claims is the connections Boko Haram has with Cameroonian businessman Alhaji Abdalla, who runs a vehicle import business with dealings in Qatar. Boko Haram has previously stolen cars and sold them through Abdalla’s firm to individuals in Qatar. The intimacy of the two parties’ relationship is demonstrated by the fact that Abdalla was one of Boko Haram’s negotiators during the French family hostage situation in 2013. Moreover, the Cameroonian military found receipts from Qatar as well as travel documents from Libya and Qatar in a Boko Haram camp in June 2014.

Something which has not received widespread attention in Western media is the confession of Sheikh Sani Haliru, a Boko Haram defector. Haliru claims that throughout his many years as a Boko Haram fighter, he visited countries like Saudi Arabia, Pakistan, Yemen, Egypt, Sudan, Somalia, Libya and Niger, and received his training in Pakistan and Libya. Although there are several caveats to such a confession, it does shed light on links that Boko Haram has to several of these countries. Boko Haram has, for example, maintained a diplomatic presence in Saudi Arabia (negotiations between Boko Haram representatives and the Nigerian government were held in Mecca in 2012), which was the country to which Mohammad Yusuf fled in 2004 during a crackdown by the Nigerian military in northern Nigeria. Salafi sympathisers from the Gulf region have also been pointed out as early donors to Boko Haram’s cause, mainly through connections Yusuf made during two hajj trips to the country. There have also been several reports of Boko Haram dispatching fighters to Sudan, Pakistan, Afghanistan and the Sahel in order to raise funds. The countries mentioned by Haliru would also give credence to reports that Boko Haram has cooperated with AQIM and al-Shabaab.

Former head of French intelligence service DGSE (Direction Générale de la Sécurité Extérieure) Alain Chouet has also stated that Qatar and Saudi Arabia have directly participated in funding Boko Haram, and that much funding occurs through shell companies based in the countries neighbouring Nigeria.

During the trial of Kabiru Abubakar Dikko Umar it was made clear that there had been extensive internal disagreements within Boko Haram regarding the sharing of funds donated by a small Algeria-based group called Musilimi Yamaa, although little proof was added to this testimony.[v]

Other smaller scale donations also occur, such as occasional donations from religious students in Cairo. These students are said to have been convinced by their Nigerian expat colleagues, who according to reports not covered in Western media sympathise with Boko Haram.[vi]

Indeed, very little evidence of either Gulf or other foreign funding exists. However, there has been an active presence of Gulf-based charities in the Sahel region for years (which will be touched upon later in the report), which may certainly have played a role in exposing several people to a radical ideology. It should also be mentioned that it is likely that individuals who have supported IS have also funded Boko Haram as a result of their pledge of allegiance.

Local and domestic donors

Whilst Boko Haram’s foreign sponsorship remains opaque, more is known about support from external actors within Nigeria. This support involves both the political and military establishment, and is often motivated by power moves or self-serving interests rather than ideological alignment.

Before 2009, several local politicians in Borno state either funded or aided Boko Haram in order to advance their own interests. In the build-up to the 2003 Nigerian general elections, several northern state politicians employed local youth gangs in order to gauge support. In Borno state, Ali Modu Sheriff employed members of Mohammad Yusuf’s group and promised them both money (50 million naira) and political influence in exchange for their support for his campaign as state governor. After winning, Yusuf was even allowed to pick a candidate for the position of Borno’s Minister for Religious Affairs as a result of Sheriff’s victory. After having failed on his promise to implement full sharia laws in Borno state, Sheriff and Boko Haram clashed, and Yusuf’s group eventually turned on their former ally and started attacking local institutions.

The enmity between Sheriff and Boko Haram has later been used as a tool by Sheriff’s political opponents, which has meant that more funds have been diverted towards Boko Haram. For example, Senator Ali Ndume was arrested in 2011 after a Boko Haram spokesperson upon interrogation confessed that Ndume had paid Boko Haram to send threatening text messages to rival politicians. Local business tycoons, such as Alhaji Bunu Wakil, have also been pointed out as major Boko Haram financiers.[vii] In Cameroon, the mayor of border town Fotokol, Ramat Moussa, was arrested after having been pointed out by Boko Haram commander Abakar Ali as having coordinated Boko Haram arms trafficking. Large stocks of weapons were found in his residency. The latter case supports a trend in which Boko Haram has found funding from northern Cameroon, especially among wealthy Kanuris (the ethnic group to which many Boko Haram fighters belong).

Nigeria’s military has also been accused of either funding or diverting arms to Boko Haram. The aforementioned testimony by Sheikh Sani Haliru stated that General Ibrahim Badamasi Babangida, also known as IBB, funded training for Boko Haram in Libya and Pakistan, and that he has ‘‘more than 600 men, women and children on his payroll.’’ Haliru also stated that President Muhammadu Buhari and other top-level officials are in on this conspiracy. According to Haliru, this is not public knowledge due to the vast connections IBB has in Nigeria’s political spheres and print media, and that he as a result of this was arrested when he attempted to present evidence.

Without giving full credence to Haliru’s claims, it should be noted that the Nigerian military has itself found evidence of their personnel either funding or aiding Boko Haram. For example, several retired high-ranking officers have been investigated for diverting hundreds of millions of dollars to Boko Haram, where the aforementioned Alex Badeh is one of them.

Brigader-General Aliyu Hussaini has also been arrested for allegedly being a member of Boko Haram and providing funds for the group. However, most observers would say that there is much less direct support for Boko Haram from Nigeria’s military than around 2009 and 2010. Many of the allegations raised against certain high-ranking officers remain unconfirmed and uncorroborated. Although there have been several cases of ‘inside jobs’ concerning military personnel providing intelligence to Boko Haram, there is little evidence suggesting that the military has directly funded Boko Haram in recent years.[viii]

Australian Stephen Davis, who negotiated with Boko Haram over the Chibok Girls case, stated that the Central Bank of Nigeria (CBN) plays an instrumental part in making Boko Haram money untraceable and practically acts as a gatekeeper. Reportedly, Boko Haram fighters had told him that transactions to their main arms supplier, who is based in Cairo, are sent through the CBN without any interference. Davis also pointed to the fact that a senior official at CBN was very close to Sodiq Ominu Ogwuche, the mastermind of the April 2014 Nyanya bombing which killed 88 people. Sheikh Sani Haliru’s testimony also mentioned that high level officials in the CBN are Boko Haram agents through their affiliation with IBB. These claims have not been corroborated.

Davis also stated that Ali Modu Sheriff continues to fund Boko Haram, which has been widely refuted by several observers and described as an attempt to divert attention away from the Nigerian government’s own failure to fully deal with Boko Haram.

This post is part of the report, “Understanding the regional and transnational networks that facilitate IED use”. To see the sections of the report please go here. This research was undertaken with assistance from the NATO Counter-IED Centre of Excellence.

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