ABSTRACT Good governance refers to a functioning public sector that respects principles such as community participation, transparency and is accountable to its citizens. This study was carried out to examine how good governance is in relation to poverty reduction with the case study of the Ministry of Finance of Somalia in Banadir. The study was guided by the following objectives; to investigate the relationship between good governance and poverty reduction, to identify the impact of community participation on poverty reduction in Banadir, Somalia, to demonstrate the effect of accountability on poverty reduction in Banadir, Somalia and to examine the impact of transparency on poverty reduction in Banadir, Somalia. The researcher used descriptive, and correlation research designs. Data was collected using questionnaires. Data was collected from two sources; primary and secondary source using a sample size of 130 respondents.