Islamic militant group al-Shabab has retaken Somalia’s key port city of Merca, residents told several news agencies Friday. The city, some 60 miles from the capital of Mogadishu, is now the biggest under al-Shabab’s control, BBC News reported.

The Sunni extremists hoisted their black flag over the Merca police station and administrative headquarters after African Union forces, which had held the port city for 3 1/2 years, retreated earlier Friday morning. The loss of Merca is a major setback for Amisom, the continental bloc’s peacekeeping mission in the country, in its decade-long fight against the Somalia-based terrorist organization.

“Amisom forces moved out at midday and the local administration and all other Somali security forces left a few minutes later — and then heavily armed al-Shabab militants entered the town,” local resident Ibrahim Mumin told Agence France-Presse. “They have been addressing residents at the district headquarters.”

The governor of Somalia’s Lower Shabelle region, which encompasses Merca and Mogadishu, also told AFP al-Shabab seized the ancient port city without fighting. The African Union regained control of Merca in August 2012 when it expelled the fighters from a number of Somali towns. Regaining control of the city, which faces the Indian Ocean, grants al-Shabab access to a port again and will provide a financial boost to the group's operations.

“It’s symbolically important because it was one of the major towns retaken from al-Shabaab and underlines the resilience and longevity of the group,” Ahmed Soliman, a regional analyst at Chatham House in London, told the Guardian. “Al-Shabaab has the ability to absorb losing control of key towns and have consistently been able to regroup in rural areas as well as strike in urban areas.”

The al Qaeda affiliate emerged in 2006 from the now-defunct Islamic Courts Union that controlled Mogadishu. Al-Shabab  launched its own insurgency on major Somali cities by 2009, controlling Mogadishu and southern Somalia until it was pushed out by domestic and international forces around 2012. Many rural areas of  Somalia  are still controlled by al-Shabab and the extremist group has increased efforts in recent months to regain control of lost territories while seeking to topple Somalia’s Western-backed government.

Amisom’s withdrawal from Merca comes three weeks after al-Shabab stormed an African Union military base outside the town of el-Ade in southern Somalia, which was manned by Kenyan troops. The group claimed to have killed 100 soldiers and captured more, BBC News reported. More than 20,000 African Union troops are currently deployed in the Horn of Africa nation. But their efforts against al-Shabab have been hindered by a lack of air power that has left their bases and supply lines vulnerable.