By Goth Mohamed Goth
HARGEISA, 19 August 2026 – A formal ceremony to launch the Public Financial Management Law (Law No. 75/2025) was held today in Hargeisa, marking the establishment of a unified legal and regulatory framework for the management, planning, collection, allocation, utilization, oversight, and safeguarding of public finances and national assets.
Public finance is the backbone of state authority, economic development, service delivery, and good governance. An efficient system for managing national resources is therefore essential to ensure accountability, transparency, and effective public service.
The Public Financial Management Law delineates the responsibilities and duties of various government institutions, establishing a harmonized procedure for managing all stages of the state’s financial operations. This law is not merely a regulation for handling government funds, but a crucial pillar for accountability, integrity, transparency, good governance, and the protection of national assets.
This new legislation strengthens several key aspects of financial management reform, including:
· Strengthening Good Governance: The law explicitly defines the responsibilities of various government bodies, ensuring that every institution and official understands their obligations in managing national finances.
· Enhancing Accountability: It establishes a clear framework for identifying who is responsible for planning, allocating, executing, monitoring, and reporting on government finances.
· Promoting Transparency and Openness: The law reinforces that budget preparation, approval, execution, and reporting must be clear, comprehensive, and understandable.
· Strengthening the Role of Parliament: It empowers the House of Representatives to fully exercise its constitutional oversight role over the budget and financial management, supported by comprehensive financial reports.
· Public Participation: The law provides opportunities for the public to contribute ideas and suggestions during various stages of the budget process and financial reporting.
· Budget System Reform: It clearly defines the stages of budget preparation, approval, execution, and review, leading to a more organized, predictable, and efficient financial system.
· Strengthening Internal Audits: Every government institution is required to establish an Internal Audit system to play a crucial role in controlling internal processes, identifying errors, and preventing corruption, embezzlement, and neglect of public assets.
· Distinction Between Internal and External Audit: Internal Audit focuses on controlling and ensuring the accuracy of an institution’s internal systems, while the External Audit (Auditor General) is responsible for examining and reporting on the overall management and use of public funds.
· Combating Corruption and Embezzlement: Internal controls, oversight, and reporting mechanisms will reduce opportunities for corruption, embezzlement, errors, and neglect of national assets.
· Modernizing Financial Management: The law encourages the adoption of modern methods and technology in financial management and government accounting.
· Implementing a Single Treasury Account: The law provides the foundation for establishing a Single Treasury Account, a modern system for consolidating and managing all government cash resources.
· Management of State Assets: It enhances the Ministry of Finance’s authority to set procedures for managing, registering, and monitoring government property and assets.
· Management of Loans, Grants, and Guarantees: The law clearly regulates loans, grants, and guarantees obtained or provided by the government, defining the responsibilities of all parties involved.
· Comprehensive Financial Reporting: Government entities will have clear obligations regarding the preparation, submission, and presentation of financial reports and accounts.
The Public Financial Management Law is a cornerstone of national financial management reform.
Its purpose is not only to ensure the accurate accounting of government funds but also to ensure traceability – where money comes from, where it is allocated, where it is spent, and the results achieved – so that responsibility and accountability are clear.
Government finances are the property of the public, not of any individual or private entity. Therefore, safeguarding and managing national assets is a legal, administrative, and national responsibility shared by all government institutions and officials.
This law will enable Somaliland to transition from a system reliant on disparate procedures to a modern, organized, transparent, open financial system founded on accountability.
Sound financial management leads to sound governance; sound governance improves public services; and when national assets are protected, national development can be realized.
Therefore, the Public Financial Management Law (Law No. 75/2025) is vital for protecting national assets, strengthening statehood, developing and delivering public services, combating corruption, and building sustainable and effective good governance.
The launch ceremony was attended by officials from various relevant government institutions. Speeches and remarks were delivered by the Minister of Finance and Economic Development, the Chief Justice of the Supreme Court, the Auditor General, the Director General of the Ministry of Finance, the Chairman of the Good Governance Commission, the Chairman of the National Procurement Board, and the Chairman of the Finance Sub-Committee of the House of Representatives.
Also in attendance were the Deputy Minister of Finance and Economic Development and the Deputy Accountant General.
During the event, presentations on the Public Financial Management Law were given by the Chairman of the Somaliland Institute of Certified Public Accountants (ICPAS) and the Director of the Public Financial Management Reform Unit, who provided detailed insights into the law’s importance, the changes it introduces, and its role in modernizing the national financial management system.
