The new law sets the financial and fiscal framework for managing Somalia's mineral and underground resources.
Somalia has enacted Law No. 10, the Law Governing the Financial System for Underground Resources. The law establishes the financial and fiscal framework for managing the country's mineral and underground resources.
The Act was enacted to ensure that revenue from underground resources is managed transparently and for the benefit of the nation. Its purpose is to set clear rules for financial reporting, taxation, and revenue management so that resource wealth supports national development.
Law No. 10, the Law Governing the Financial System for Underground Resources was enacted and entered into force on March 20, 2023.
Resource wealth can be a powerful engine for development, but only if it is managed transparently and fairly. This law was designed to give Somalia the financial discipline needed to handle revenue from its underground resources.
The law establishes a clear financial framework for resource management, setting out how revenue is to be reported, collected, and accounted for.
It addresses the fiscal obligations of companies operating in the sector, including taxation and the financial conditions attached to resource activities, so that the state receives a fair return.
The law also recognises the importance of protecting the environment and communities, linking resource exploitation to obligations such as environmental remediation.
By setting transparent financial conditions, the law aims to attract responsible investment while ensuring that the benefits of resource development are shared and properly accounted for.
This law is important because it brings financial discipline and transparency to the management of Somalia's underground resources. Clear rules on reporting, taxation, and revenue management help ensure that resource wealth benefits the nation rather than being lost or mismanaged. Transparent financial conditions also make Somalia a more attractive destination for responsible investment.
“Resource wealth only becomes national wealth when it is managed transparently and accounted for properly. By setting clear financial and fiscal rules, this law helps ensure that revenue from underground resources supports development. Rigorous reporting and consistent enforcement will be key to turning these rules into real public benefit.”
, Hawa A. Wehelie, JD (Juris Doctor), MBA (Master of Business Administration)
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.