Central Bank of Somalia on a transformative journey
Somalia’s Central Bank (CBS) is on a transformative journey. Its 2020-2024 strategic plan charts the CBS’ journey to being a policy-oriented institution and achieving its core functions. The goals include the establishment of monetary policies and regulatory frameworks which will help reform the banking sector and build financial stability.
The transparency which adopting International Financial Reporting Standards (IFRS) will bring enhances CBS’ international comparability and the quality of its financial information. Investors and other market participants will be able to use this information to make better economic decisions.
To lead IFRS’s adoption the CBS is developing its internal skills and resources. This will allow the Bank to develop financial statements which are compliant with IFRS.
ACCA partnered with Baker Tilly Somalia and PWC Kenya to deliver consultancy services and training which are supporting CBS on its road to IFRS compliance.
Somalia is experiencing dynamic change and progressing structural reforms. At the end of 2023, Somalia became the eighth member of the East African Community. This brings opportunities for Somalia to benefit from regional trade integration. The country is less fragile despite a complex security situation and the many regional climatic shocks it has experienced.
The CBS are building a staff complement with the advanced skills related to IFRS. These skills are needed by the bank so that they can use the acquired skills to guide and supervise the Somalian banking and financial services sector.
The project supported the bank by:
- Providing detailed information on the regulatory and operational frameworks adopted by comparator countries
- Reviewing and evaluating the implementation of IFRS by the bank
- Undertaking an impact assessment of the implementation of IFRS 9
- Support the CBS in the development of a model set of International Financial Reporting Standards (IFRS)-compliant financial
- Draft guidelines on the application of IFRSs and paying emphasis on IFRS 9, IAS 12 and IAS 19 to Banks.
- Provide tailored capacity building to CBS staff covering the technical aspects related to the implementation of IFRS
The partnership with PWC Kenya, Baker Tilly Somalia and ACCA brought to the CBS national, regional and international skills and experience to respond successfully to the CBS’s needs and challenges. Detailed reviews produced tools which the CBS could immediately use particularly a fully revised accountancy policy manual.
