Hawala, the unregulated and traditional Somali transfer that works with a network of agents is allegedly funding the transfer of fire arms from somali to Kenya.
A broker in Garissa, North of Kenya named Husein Aden said that weapons are being transfers without having to move them physically just like money is transferred.
This is how it works, a client pays a broker the money they wish to transfer, the broker then calls his counterpart at the transfer destination authorizing the payment. On the delivery side,the broker pays the recipients with his own money while charging a two percent commission.
“Hawala money is getting into the pockets of Al-Shabaab, we need an immediate crackdown on hawala brokers and we need to use Somalis who are against terrorists to smoke out this network of traders.” said Yusuf Muhamed, a high-ranking police officer
Ibrahim Ahmed from local NGO Northern Kenya Caucus said that weapons are shipped from Russia and Ukraine to Somalia and find there way to East Africa through the porous border between Southern Somalia which holds the Al-Shabaab.
It is believed that the militia group uses the hawal transfer service to buy the smuggled weapons for their counterparts in Kenya as well as other parts of East Africa.
A person in Somali will give their local broker the weapons they wanted transferred and a broker in Nairobi would give the weapons they have in possession to the recipient, the original weapons will not have moved.
Francis Mugatha, an immigration official at the Kenya-Somali border, said: ” hawala was being exploited, particularly in the trade of weapons. The gun business is thriving in areas such as Nairobi’s Eastleigh suburb. They continue to use a network of ‘hawaladars’ to fund their operations, such as paying for Al-Shabaab trainees. Further, this is how Somali militia groups in North Eastern Province are being financed.”
This transfer system is under investigation in Kenya as it is believed that the Al-Shabaab where using the system together with unregistared SIM cards that could have helped in the recent attack at the Westgate shopping mall.
“Cracking down on unregistered SIM cards is only addressing the communication part, but we need to hurt the terrorists by blocking routes where their money moves. At this time in the country, it is very dangerous to have money moving around unregulated,” said Yusuf Muhamed, a high-ranking police officer.
The Central Bank of Kenya (CBK) outlawed the use of hawala in April by releasing guidelines that required operators of cash-sending firms to register with the bank and pay a Ksh.5 million ($ 58,800) for a license. Operators also have to maintain a minimum capital of Ksh.20 million ($235,300).
“Hawala money is getting into the pockets of Al-Shabaab, we need an immediate crackdown on hawala brokers and we need to use Somalis who are against terrorists to smoke out this network of traders, the same way Somalis assisted in driving out Al-Shabaab out of southern Somalia,” Muhamed said.
The main problem in the transfer service is that it is not registered and not the service, which it should be just like the mobile money transfer system.
The service was expected to shut down on Oct 16 as Barclays bank announced that it would no longer provide services to hawala due to their likelihood to buy world’s best air rifles using the cash. Kenya’s Ministry of Finance suspects that the money transferred through this service comes to about $70 million monthly, but have no records to prove this.
Having limited baking services, M-Pesa does not work let alone other mobile money transfer services leads to this being the only mode of transfer, even Aid agencies including United Nations. So from that reason we cannot entirely put it off.