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This paper critically evaluates the institutional effectiveness and limited operational mandate of the Somali Petroleum Authority (SPA) in the governance of Somalia’s emerging oil and gas sector. Although Somalia holds significant hydrocarbon potential, capturing these economic opportunities requires a transparent regulatory framework and competent oversight institutions. The 2020 Petroleum Law assigns the SPA key responsibilities, including license administration, compliance enforcement, and oversight of upstream activities. However, the Authority has struggled to execute these functions, resulting in diminished transparency and slow sectoral progress. Using a qualitative, comparative case study methodology, the research analyses legal provisions, institutional documentation, and academic sources to examine the SPA’s designated functions and assess whether its shortcomings arise from legislative constraints, weak implementation, or authority overlap—particularly with the Ministry of Petroleum and Mineral Resources. Comparative insights from established regulatory models in Ghana and Uganda provide contextual benchmarks. Findings indicate that, despite a seemingly comprehensive legal mandate, the SPA’s effectiveness is undermined by ambiguous institutional arrangements and overlapping responsibilities. This dysfunction has contributed to opaque licensing practices, inadequate contract monitoring, and weak enforcement of due diligence requirements, including the failure to revoke non-compliant agreements. Such governance deficiencies risk deterring investment, eroding public trust, and compromising sustainable resource management. The study recommends clarifying institutional roles and strengthening the SPA’s enforcement capacity and operational autonomy. These reforms are critical to improving regulatory governance and ensuring Somalia’s petroleum resources contribute to sustainable national development.
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