The new law sets out the rules for budget allocation, transfers, borrowing, and oversight for the 2023 fiscal year.
Somalia has enacted Law No. 1, the 2023 Budget Framework Act, also known as the Law on the Implementation of the 2023 Budget. The law provides the legal framework for how public funds are allocated, managed, and overseen during the 2023 fiscal year.
The Act was introduced to improve financial accountability and the efficient use of public resources at a time of significant domestic revenue and foreign aid inflows. Its purpose is to create a stable and predictable financial environment that supports sustainable development.
Law No. 1, the 2023 Budget Framework Act was enacted on December 31, 2022 and entered into force for the fiscal year beginning January 1, 2023.
A clear budget framework gives a government discipline and gives citizens confidence that public money is being handled responsibly. The 2023 Budget Framework Act was designed to provide that structure for Somalia's spending.
Article 3 (Budget Allocation) sets the financial scope of the law by allocating the state budget for activities running from January to December 2023.
The law sets careful rules for moving money. Article 7 (Budget Transfers Among Offices) allows the Minister to reallocate funds between offices when one cannot fully use its budget, while Article 8 (Transfer of Reserve Budget) permits the use of reserve funds for urgent needs, subject to regular reporting to Parliament.
Borrowing is tightly controlled, and other provisions protect fiscal discipline, including an order of priority for payments if revenue falls short and a requirement to return unspent balances to the central treasury at year end.
The 2023 Budget Framework Act matters because it gives Somalia's public spending a clear and disciplined legal structure. Strong controls on payments, transfers, and borrowing, together with parliamentary approval and reporting duties, improve transparency and reduce the risk of misused funds.
“Disciplined public finance is built on clear rules about who may spend, who may borrow, and how money is tracked. This Act gives Somalia exactly that kind of structure for 2023, with strong parliamentary oversight and firm controls on transfers and loans.”
, Dr. Abdiwahid Osman Haji, LL.M. (Master of Laws), LL.B. (Bachelor of Laws)
Managing Partner at Mogadishu Law Office
This release is provided for general information and does not constitute legal advice. Professional legal advice should be obtained before acting on any matter discussed here.