Tuesday, November 05, 2013
Pirates have secretly invested part of the Sh35 billion ransom in the lucrative miraa trade in Kenya, a new report has revealed.
Over seven years, the dirty cash from piracy in Somalia has
fuelled criminal activities including funding militia like the
Al-Shabaab terrorist group that killed over 70 people in the Westgate
But financiers of piracy have “cleaned” the dirty cash by
investing in miraa trade in Kenya, which is largely unmonitored by
government, in miraa trade in Kenya, which is largely unmonitored by
government, says the report by the World Bank, Interpol and the United
Nations Office on Drugs and Crime released Monday.
The study says much of the ransom is not being “cleaned” through
the real estate sector in Kenya, as is widely believed, but mainly
through the miraa trade, which is most vulnerable to illicit
international cash flow.
An estimated US$339 million (Sh28.96 billion) to US$413 million
(Sh35.3 billion) was paid in ransom between April 2005 and December
2012, according to the report.
“Ransom was laundered through the khat trade, particularly in
Kenya, where it is not monitored and therefore is the most vulnerable to
illicit international flows of money,” says the report titled Pirate
Trails: Tracking the Illicit Financial Flows from Pirate Activities off
the Horn of Africa.
It added that the ‘dirty’ cash was invested in criminal
activities such as arms trafficking, funding militias, migrant smuggling
and human trafficking, and was used to further finance piracy
“Given the lucrative nature of the khat trade, which is a
predominantly cash-based business, the culture of khat chewing in Kenya
and Somalia, and control that Somali nationals have over the
distribution network of the khat trade, there is evidence suggesting
that pirates are increasingly buying into this network,” the report
It added: “It is not surprising that the khat trade is partially
funded by ransom money from pirates. While pirates buy the khat for
consumption purposes, several pirate financiers are also investing in
The report says pirates have bought into the vast and highly
lucrative miraa distribution network in the region, which moves the
commodity from Kenya to almost all corners of Somalia and other
countries in the region.
The network, which is efficient in distributing the highly
perishable miraa, involves many players, including the farmers who grow
the commodity, the middlemen who buy khat in markets in Kenya, drivers
who are responsible for ensuring its swift delivery, and local carrier
companies that fly it into Somalia and other foreign airports.
“The concern is that pirates are buying into the khat trade and
using it as a way to launder the proceeds of piracy underpinned by
control that Somalis have over the distribution network of the khat
trade,” said Stuart Yikona, a World Bank Senior Financial Sector
Specialist and the report’s co-author.
According to a United Nations report on piracy published in 2011,
one of the fathers of piracy, Mohamed Abdi Hassan (also known as
Afweyne), who has publicly retired from piracy, invested heavily in the
khat trade. Pirate warlord Isse Yuluh was also reportedly engaged in the