As African cities are rapidly growing, the question of how to finance the necessary investments in infrastructure and services is becoming increasingly pertinent. Therefore, cities are now looking at expanding their local revenues. In this context, one of the favoured local taxes across the world is the property tax. All African countries, with the exception of Burkina Faso and Seychelles, already have some form of property tax in their legislation. The question now is how to reform these systems from a policy and administrative perspective to ensure cities are realising their revenue potential. This will be essential to financially support the on-going rapid urbanisation.

In Hargeisa, the capital of the self-declared independent country of Somaliland, property related taxes already make up the highest proportion of local taxes collected. However, at just over 8 million USD in 2016, total overall local revenue collection remains low, particularly compared to the developmental needs of the city. Therefore, the Hargeisa city government is now exploring further ways to enhance its own-source revenues by reforming the municipal finance system more generally and potentially, more specifically, its property taxes specifically. This policy brief, building upon the working paper An Overview of Municipal Finance in Hargeisa, Somaliland, provides a more in-depth analysis of the current state of property tax and policy considerations to improve its future potential in the context of the growth of the city.