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This study investigated the Challenges facing the Implementation of Administrative Decentralization in Somaliland local governments: By taking the Case of Borama Municipal Council. Decentralization was viewed as transfer of powers from central government to lower levels. The problem of the study was that administrative decentralization at the Borama Municipal Council had not been well implemented. Procurement procedures were not fully developed and the local government still required approval of the central government. This study focused on capacity building and planning for implementation of administrative decentralization. The status of capacity building in Borama Municipal Council was found to be poor 2 (4, N = 175) = 14.057 and planning was found to be poor 2 (4, N=175) = 68.286. The study concluded that capacity building is the greatest challenges of implementation of administrative decentralization in Borama Municipal Council. The study recommends that the Ministry of Interior Affairs in Somaliland and the stakeholders to develop awareness, campaign, training for the employees on implementation of administrative decentralization.