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Business in Baidoa Improving After Shabaab
Shabaab Rule Imposed Heavy Taxes and Curfews
By ABDIHAKIM WARSAME 07/14/2012
Downtown Baidoa
Downtown Baidoa
Since al-Shabaab seized large parts of the failed state of Somalia, many families have been suffering economically. The reign of the militants has seen a sharp fall in almost all spheres of the already moribund economy, where pastoralism has long been the lifeblood. During their rule, the cost of living has surged to new highs, leaving many families struggling to pay their bills. While many businesses are facing difficulties and many families in the south and central parts of Somalia are finding it hard to meet their daily needs, businesses also have to endure inordinate bureacracy and taxation, imposed by the al-Shabaab leadership.

The consequences of the Islamist-induced unfavorable business environment are evident in the closure of many important markets. The city of Baidoa, which is located about 240km from the capital of Mogadishu, bears witness to the brunt of the economic sabotage inflicted upon residents by the rule of al-Shabaab. Like the port city of Kismayo, Baidoa was a flag-ship town for the operation and control of the group.

Somalia Report interviewed Abdirashid Farah who has been a businessman in Baidoa over the last two decades, witnessing the decline of the economy, and the following is an excerpt:

SR: What kind of business activity are you engaged in?

Farah: I am a small scale retailer who sells food stuffs like rice, sugar, spaghetti, cooking oil, and also some domestic needs like soap and detergents.

SR: Could you please tell us about how your business has been affected by the reign of al-Shabaab?

Farah: As far as my business operation is concerned, the al-Shabaab rule has brought about an unfavorable business environment. My businesses completely collapsed under their authority. It was not their intention, I think, to interfere with our businesses, but their policies have had a profound impact on our general performance.

SR: What are some of the rules that undermined your business?

Farah: The regulations they imposed were rigid and very exploitive. They included an unreasonably heavy taxes, regardless of the assets of the business. We paid tax according to the needs and the situation of the militia, but these were not charged with regard to the strength of the business. We formed a business organization to fight for our rights. You must know that when the hyena is the judge, the goat has no rights.

SR: What were the greatest frustrations for your business under the rule of the Islamists?

Farah: As usual in business, we are very much concerned with making profits and we struggle to minimize the risk of incurring losses. So the irritating issue as far as our businesses were concerned is the restriction on the time we operate. Sometimes we were forced to close the shops as early as 7pm due to night curfews, which hindered our trade. There was too much infringement of freedom of movement for us and for our customers, and I believe that would be the most frustrating element for a businessman.

SR: How is the situation now, after al-Shabaab were dislodged?

Farah: It seems that now we have the strength to do our businesses more freely because we are no longer forced to close shops early. The issue of heavy taxation are also over; we now pay a reasonable tax, which we are happy to pay, given the protection we receive in return. You can easily observe the managerial differences between a government on one hand, and a selfish group who rules according to their wishes on the other. Now prices of essential commodities have returned back to normal. People have resumed their normal lives and are leading an independent life.

SR: What is the transitional government doing to assist the businesses in Baidoa?

Farah: I can assure you that the government has helped us a lot. The biggest remedy for our businesses is the downfall of the al-Shabaab militia, which was hindering our day-to-day operations. This is why we are so much proud to pay tax to the government. We want the government to maintain the current level of security and improve it.

Prices Before and After al-Shabaab Rule

1 sack of sugar, 30$
1 sack of rice, 25$
20 litres of cooking oil, 15$

Prices During al-Shabaab Rule

1 sack of sugar, 40$
1 sack of rice, 30$
20 litres of cooking oil, 20$