Income from pirates in Somalia could be as high as three times the entire Somali Puntland government’s budget, and smuggler-fuelled informal trade in Benin accounts for 70% to 80% of the economy. That’s just one eye-opening revelation from a transnational investigation into pirates, smugglers, corrupt tycoons and African development by the Forum for African Investigative Reporters (FAIR).
In the eyes of the international justice system and the world, the pirates of Somalia are criminal outcasts. However, to a majority in their home bases they are heroes, bringing food to families that would otherwise be starving. They are praised for providing jobs and developing towns not only in Somalia, but even in neighbouring Kenya. The pirates, when asked, say they see themselves as taking what is rightfully theirs, especially now that foreign ships have emptied their coastal waters of fish. “Coast guards”’ they call themselves, meaning they fill a void that should normally be filled by government.
“Whenever we hijack ships, we restock on essentials like food. We buy goats for meat and khat [a mildly narcotic herb that is chewed – pronounced ‘chat’] from the residents. We pump money into the region’s economy. How else are the people here going to survive? All the fish in our sea have gone,” says proud pirate Abdullah Abdi of Eyl, a small coastal town in the semi-autonomous region of Puntland in Somalia.
Abdi is one of the estimated 1,500 pirates who have been criss-crossing the busy Indian Ocean shipping lanes and the Gulf of Aden which connects the Red Sea to the Indian Ocean. The young men, some of them former fishermen, but also many who used to work as bodyguards and militiamen for Somalia’s many warlords and politicians, have captured dozens of vessels and more than a thousand hostages, earning millions of dollars in ransom.
It is difficult to establish the exact amount of money paid by shipping companies as ransom to pirates. On 6 November 2010, international news agencies reported that Somali pirates had released the South Korean oil tanker, Samho Dream, after payment of a ransom of $9.5 million. The tanker was hijacked in April and was carrying more than two million barrels of crude oil from Iraq to the US.
According to the World Peace Foundation, an international think-tank of scholars, diplomats, lawyers, military officers and maritime partners, working on an initiative to combat piracy, the shipping industry is losing more than $100 million a year through hijackings.
The losses from ransom alone, the net pirate income, could account for at least half of that amount. Local sources told Fair that one band of pirates, the father-and-son empire of Mohamed Hassan ‘Afweyne’ and Abdikadir Abdi that operates from central Somalia, hijacked seven ships in 2009 alone. The sources were able to name five of the ships and the dates: the passenger cruise Ship Indian Ocean Explorer (2 Apri l 2009), the bulk carrier Ariana (2 May 2009), the fishing vessel Alakrana (2 October 2009), the container ship Kota Wajar (15 October 2009) and the bulk carrier Xin Hai (19 October 2009).
If ransom payments, as is estimated, vary between $100,000 and $10 million, with an average of $1 million each, the amount paid in ransom to this band of pirates in 2009 alone could be as high as $7 million.
According to observers such as the UN Monitoring Group on Piracy, there are at least seven such syndicates, bringing Fair’s estimate of possible yearly profits from piracy in Somalia up to nearly $50 million.
In comparison, development aid projects in Somalia in 2009 by the UK and the US in employment creation, agriculture and livestock amounted to no more than $5 million and the total Puntland government budget in the same year amounted to only $17.6 million.
The UN Monitoring Group says the pirate syndicates roaming the Somali coastline can be divided into two main groups. The one from central Somalia’s two infamous piracy hubs, Xarardhere and Hobyo. This region is home to “Afweyne” and his son. The other main group operates from Puntland in the north-eastern part of Somalia.
“Pirate economics” are so powerful in Puntland that it is fast becoming a criminal state. The government of President Abdirahman Mohamed Faroole, instead of fighting piracy and developing his region and country, has started to share in pirates’ earnings. According to the UN Monitoring Group, senior Puntland officials, including Faroole himself and members of his cabinet (notably the minister for interior General Abdullahi Ahmed Jama and the minister for internal security, General Abdillahi Sa’iid Samatar), have received proceeds from piracy and kidnappings. The Monitoring Group said in its 10 March 2010 report that “over 30% of ransom payment was retained by Puntland government officials”.
Developments based on pirates’ earnings are evident in towns like Eyl, a village that once used to live off fishing. Now that the fish are gone, Eyl’s sandy beaches, adorned with abandoned wooden fishing boats, are ringed with dozens of flashy homes for the newly rich.
A quick survey shows how his fellow townsfolk appreciate Abdi and his colleagues. Zeynab Abdi (no relation), a frail 58-year-old who takes care of her four grandchildren orphaned in Somalia’s decades-long civil war, says her life is better now that pirates take care of her and her family. “When they get money, I can feed my children. That which comes from pirates is my lifeline.”
Zeynab is especially fond of pirates Mohamed and Farole, who “help her mostly” with regular rice, beans and powdered milk rations, even though she is not a close relative of theirs. “They give me all this every time they are paid a ransom. I and my grandchildren are comfortable. Piracy is the buttered side of our bread,” she nods. Getting news about newly hijacked ships is now part of Zeynab Abdi’s morning routine, after prayers.
A few streets away, grocer Sugule Dahir is also full of praise for the pirates. “There are many shops now and business is booming. Internet cafés and telephone bureaus have opened, and people in this area are happier than they were before piracy started.”
Ahmed Ali Ahmed, a micro-economist and businessman who runs several schools and media houses in Somalia, has noted that houses are shooting up where there were none. “[Pirates] are fond of building big houses, if it should cost only $30,000 these people easily invest $60,000 to get the same thing, because they don’t care. I have heard that they have started building houses even in Mogadishu. The contractors benefit, they are the ones who supply them (the pirates) with alcohol and khat.”
Twenty-six-year-old Anab Farah’s business is also booming, but in her case in a very special way: the young divorcee is caterer of choice to the hostages the pirates hold in various locations. Farah prepares the three daily meals for the hostages, handing them over to the hostages’ guardians as take-aways. She also sells them khat. (Thanks to the pirates’ business, the price of a kilogram of khat has gone up to $66, compared to $18 in other parts of Somalia.)
“The pirates are important to my work. Many days, I earn the equivalent of 400 American dollars. It feeds my family and I am planning to buy a car very soon,” says Farah, before breaking into a song that is popular in Eyl these days: “Who else thinks about our plight, as Somalis, other than the pirates”.
“Pirates, Smugglers and Corrupt Tycoons – Social Bandits in Africa” is a transnational investigation undertaken by Fair, a professional association of investigative journalists in Africa which aims to build investigative journalism throughout the continent.
Fair’s investigative team for this project are Christophe Assogba Degbe, editor of Benin’s daily newspaper La Nouvelle Gazette; Theophilus Abbah, editor of Sunday Trust, a national investigative weekly publication with headquarters in Abuja; Evelyn Groenink, who published numerous investigations into arms trade between European countries and the southern African region; and veteran investigative journalist and journalism trainer from Zimbabwe, Charles Rukuni, Fair’s investigative project manager and peer mentor. Rukuni’s exposés have ranged from government programmes gone wrong to diamond smuggling, and still edits The Insider, Zimbabwe’s only investigative newsletter. A member of Fair who contributed to the report chose to go under the pen name of “Mohamed Kadir” because his life was threatened by during the investigation.