Experience / Case study
Rewriting the statute behind Somalia's central bank.
CAPABILITY
Financial Services · Legislation
CLIENT
The Central Bank of Somalia
INSTRUMENT
The Central Bank of Somalia Act, Law No. 130 of 2012
STATUS
Engagement concluded · draft Amendment Act delivered
THE SITUATION
Central-bank law is where monetary credibility lives: independence, limits on lending to the state, governance, audit. Somalia was asking the world to trust its financial system. The statute had to be worth trusting.
The founding Act was written at the start of Somalia's post-transition rebuild. A decade on, the country had completed HIPC debt relief — US$4.5 billion, December 2023 — entered an IMF programme, and was preparing the financial legislation that would arrive in 2025. The statute had to catch up. The Central Bank engaged Insaaf to conduct the review.
WHAT WE DID
Article by article, against seven comparators.
We analysed the Act clause by clause and delivered a discussion paper proposing amendments — each with the deficiency identified, drafted amendment language, a rationale, and comparisons against the central-bank statutes of Kenya, Uganda, Tanzania, Nigeria, Ghana, Egypt and South Africa, alongside IMF and Basel-line standards. Then we drafted the amending legislation itself.
Through committee — and the record shows real negotiation.
Accepted: repealing the article that let government direct the Bank in "exceptional circumstances" — the independence provision; cutting the ceiling on direct advances to government from 15% to 10% of revenue; a board audit committee; defined capital; audit modernised to international standards; and an explicit new mandate over Shari'ah-compliant finance, the committee noting that most Somali financial institutions are Shari'ah-compliant. Counter-proposed: on board expansion, the Bank came back with its own structure — nine members with a full set of specialised subcommittees. Rejected: our proposal to reduce the share of earnings held in general reserve — the Bank chose the stronger capital cushion.
This is what law reform actually looks like.
Drafted positions, institutional pushback, revised text. Not a consultant's report that sits on a shelf — a statute worked through the institution that has to live under it.
THE OUTCOME
A draft Amendment Act, an institution that had genuinely engaged with every proposal, and a firm that has read — and written — the legal foundations of Somalia's monetary system. That knowledge now serves every bank, payments company and investor we advise.
The team — Hamza I. Abdullahi (lead) · Abdirizak Mustaf Ahmed
The deepest proof a financial-regulation practice can hold: the central bank asked us to review its own statute.
WHY THIS MATTERS TO YOU
When your licence application, opinion or product structure reaches the Central Bank of Somalia, it is read under a statute we have analysed line by line — and argued over with the institution itself. Very few regulators anywhere have that relationship with a private firm. This one does.
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