Establishing frameworks for municipal finance in Somaliland

• A lack of appropriate policies for municipal revenue collection poses a significant fiscal challenge for many low-income country cities.
• The IGC’s Astrid Haas was invited by the Somaliland Ministry of Interior to co-chair their Municipal Finance Taskforce and to deliver a workshop on municipal finance.
• The workshop was welcomed by government officials, who shared municipal finance data with Ms Haas to conduct further analysis.
• Following November 2017 elections, she presented two papers to the incoming Minister of Interior, who was extremely pleased with the analyses and requested them to form the basis of the inaugural Taskforce meeting in April 2018.

Following an IGC scoping visit to Hargeisa, the capital city of the self-declared Republic of Somaliland, the Somaliland Ministry of Interior approached Astrid Haas (Cities that Work Manager and IGC Uganda Senior Country Economist) for collaboration on improving Somaliland’s framework for municipal finance. Ms Haas was invited to co-chair the newly-established Hargeisa City Council Tax Administration Taskforce (HATAF).

The Kampala Capital City Authority (KCCA) was also requested by the Ministry to share its experience with municipal revenue administration reform. In her capacity as the Municipal Finance Taskforce Co-Chair, Ms Haas and the KCCA delivered a workshop to government officials in October 2017.

The workshop was opened by the Somaliland Deputy Minister of Interior and attended by officials from the City Government of Hargeisa, Local Government Institute, Ministry of Finance and UN Habitat. Ms Haas presented on the overall importance of municipal finance, the different levers of change for reform and the role of land and property taxation in enabling appreciating land values to finance public investments. Patrick Musoke (Deputy Director of Strategy at the KCCA) presented on Kampala’s successful revenue collection reforms.

The workshop was well received by policymakers, who appreciated the opportunity to collaboratively step back and think carefully through potential frameworks for their nascent municipal tax system. They subsequently shared municipal finance data with Ms Haas, upon which she produced two analysis papers on property tax and municipal finance more generally, respectively.

Following elections in Somaliland in November 2017, Ms Haas presented these papers to the incoming Minister of Interior and his staff in early 2018, who said they intended to use them as the basis for future reform.