Mogadishu - Somali government troops backed by AU peacekeeping troops have taken control of the strategic town of Balad from rebels, officials and residents said on Wednesday.
The town of Balad had been under the control of the al-Qaeda linked militant group of Al-Shabaab for the past three years.
Somali government forces and AU peacekeeping troops on Tuesday rolled into the town without facing much resistance from Al-Shabaab fighters.
Residents said the rebel fighters fled from the town as advancing government forces and AU peacekeeping troops AMISOM closed in on the key agricultural area, a key road linking southern and northern Somalia.
"Securing Balad allows the local population in the farming region to build their livelihoods free from extortion of money which Al-Shabaab used to fund their daily terror activities against the Somali people," AMISOM said in a statement.
Somali Prime Minister Abdiweli Mohamed Ali visited Balad hours after the rebels were forced out of the town.
The fall of Balad is a huge blow to the rebel group which has lately been facing a string of losses of territory to Somali government forces and AMISOM troops.
The Al-Shabaab in May lost Afgoye, another key town to the northwest of Mogadishu, to Somali troops.
Balad is also 50 km from the other provincial capital of Jowhar in the Middle Shabelle region and a main gateway for north and central Somalia.
Capture of Balad and Afgoye are considered a massive setback for Al-Shabaab and an enormous boost for the security of Mogadishu as the militant fighters used the towns to plan and launch attacks on targets in the capital.
The two agricultural towns are key breadbasket for Somalia and have thus been major source of revenue for the rebels who imposed hefty levies on local agricultural produce.