PROVISIONAL CONSTITUTION
CHAPTER 13: PUBLIC FINANCE
Article 122. Principles of Public Finance
The Principles of public finance will be discussed between the Federal Government and Federal
Member State in accordance with the Constitution.
Article 123. The Federal Central Bank
(1)
A law passed by the Federal Parliament shall establish the Federal Central Bank of the Federal
Republic of Somalia.
(2)
The Federal Central Bank of the Federal Republic of Somalia shall be responsible for formulating
and implementing financial policies and monetary policies and all the banks shall abide by the
regulations set by the Federal Central Bank.
(3)
The main functions of the Federal Central Bank of the Federal Republic of Somalia are to:
(a)
Produce currency;;
(b)
Control inflation;;
(c)
Stabilize exchange rates;; and
(d)
Establish a sound banking system.
(4)
The financial policy shall be based on the market forces and lending shall not be based on
administrative decisions.
(5)
The Federal Central Bank of the Federal Republic of Somalia has full authority to execute the
monetary policy.
(6)
The Federal Central Bank is the National Reserve Bank
Article 124.
Federal Legislation on Financial Matters
A law enacted by the Federal Parliament shall provide the framework for financial management with the
following characteristics among others:
(a)
The preparation, timetable and procedure for presenting the budgets of Federal Member
States and districts in a transparent, accountable and efficient manner;;
(b)
Guarantees by the Federal Government for loans raised by Federal Member States;;
(c)
Procedures that the Government will follow for public procurements;;
(d)
Auditing of accounts of non-governmental bodies that receive government funding;; and
(e)
General measures necessary for the implementation of this Chapter.
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