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Somalia, October 26, 2026 - For an ordinary Somali citizen, the journey of public money can be difficult to follow.
A tax may be collected by one level of government, transferred to another and eventually spent on a service delivered at yet another level. When that happens, a simple question becomes increasingly important: who is responsible for explaining how the money was used?
That question sits at the centre of Somalia’s next stage of public finance reforms, as the country seeks to raise more domestic revenue while strengthening the institutions responsible for managing and spending it.
The World Bank’s Somalia Public Finance Review 2026 finds that Somalia has made progress in strengthening public financial management, including improvements in payroll controls, fiscal reporting and budget transparency.
But it also warns that implementation remains uneven, with different financial management systems operating across agencies and between the Federal Government of Somalia and Federal Member States.
For citizens, the issue is not simply whether governments collect enough money. It is whether there is a clear trail from money collected to money allocated, money spent and services delivered.
The challenge becomes more complicated under Somalia’s federal system, where different levels of government have different responsibilities for raising revenue and delivering services.
During a pre-launch briefing on the report, World Bank Senior Governance Specialist Mahmoud Yassin explained that revenue collection currently happens in parallel rather than through one national system in which revenues are collected and then shared.
“Each level of government collects whatever revenue they can collect from the territories that they control,” Yassin said.
He added that although legal frameworks exist at both federal and Federal Member State levels, there are overlaps in the taxes being collected, making the relationship between the different levels of government an ongoing intergovernmental policy issue.
That creates a governance question beyond taxation: when responsibilities and resources are divided, accountability must also be clearly divided.
The Public Finance Review says expenditure responsibilities, revenue assignments, intergovernmental transfers and local government financing remain only partially defined and are often contested in practice. It identifies stronger public financial management capacity and clearer fiscal arrangements as central to improving service delivery.
One of the clearest examples raised during the briefing concerns the Banaadir Regional Administration (BRA), whose position within Somalia’s federal architecture is distinct from that of the Federal Member States.
World Bank Senior Economist Stella Ilieva said the administration's fiscal reporting presents a particular challenge because its reporting requirements are not yet clearly integrated into the same national framework used by the Federal Member States.
“It's a significant amount of money that is collected and spent by an entity without proper financial management rules,” Ilieva said during the briefing, while discussing the reporting challenge.
Yassin provided additional context, noting that the BRA participates in intergovernmental platforms and receives substantial intergovernmental transfers. He said the Public Finance Review includes BRA data, including domestic revenue and per-capita calculations, but identified a gap around the publication and consolidation of its fiscal reports.
The issue, therefore, is not simply whether information exists inside government.
It is whether citizens can see, understand and follow that information.
The World Bank briefing noted that Federal Government and Federal Member State fiscal reports are published and that the accounts of the Federal Government and Federal Member States are subject to audit and transparency requirements. The report identifies strengthening audit follow-up and accountability as part of the reforms needed to improve public financial management.
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The accountability question matters because public finance is ultimately about more than government accounts.
It is about whether a school receives the resources it needs, whether a health facility can function, whether roads are maintained and whether local administrations have the resources to deliver the services expected of them.
The Public Finance Review finds that weak coordination between levels of government can result in duplication and service gaps. It also says unclear expenditure responsibilities, unpredictable transfers and uneven public financial management capacity weaken the connection between government spending and outcomes.
This is particularly important at the local level, where citizens interact directly with the state.
The report notes that local governments are fundamental to a functioning multilevel governance system because this is where many public services are delivered and where citizens interact with government. Yet local administrations remain significantly constrained by limited resources, varying institutional capacity and inconsistent fiscal and administrative data.
In practical terms, a citizen may know that government has promised a service but may not know which level of government is responsible for financing it, which institution received the money or where to seek an explanation if the service does not materialise.
Somalia is under growing pressure to mobilise more domestic resources as external grants decline.
The World Bank says the country must therefore move towards a public finance model increasingly anchored in domestic resources, stronger institutions and greater cooperation between levels of government.
But collecting more money without strengthening the systems that track and control it could leave citizens asking the same questions.
The report consequently recommends measures including stronger payroll controls, improved procurement, integration of core financial systems and stronger audit follow-up and accountability.
This is where accountability becomes an essential part of fiscal reform rather than an issue to be addressed after revenue has been collected.
If Somalia succeeds in creating clearer rules over who collects revenue, who receives transfers, who is responsible for spending and who must report on the results, citizens could have a much clearer picture of how public resources translate into public services.
For a country rebuilding institutions while managing limited resources, the question is not whether every level of government should operate in exactly the same way.
Ilieva stressed that effective federalism does not require every jurisdiction to be identical. What is required, she said, is agreement on the destination, greater clarity over roles and practical mechanisms for sharing resources and coordinating decisions.
Somalia's fiscal future will involve different governments performing different functions. But from the perspective of a citizen, the accountability chain should be much simpler:
Where did the money come from? Who received it? What was it spent on? Who was responsible for delivering the service? And what happened when the promised result was not achieved?
Those questions may sound basic, but answering them consistently could become one of the most important tests of Somalia's next phase of public finance reform.
Because ultimately, better public finance is not only about balancing government books. It is about building enough trust for citizens to believe that the resources they contribute, and the resources their governments receive, are being converted into better services and better opportunities.