Thousands watched a parade staged to commemorate the occasion during which colourful groups from civil society marched, walked, or danced along Independence Avenue, followed by a full military parade.
"I've been here since four in the morning and there were many people here before me," said Mohammed Omer, a university student. "I'm here because my country is not recognised but I am still proud of our achievements."
Somaliland's president Ahmed Mohamed Silaanyo watched the procession from under a huge banner which read: "The international community is obligated to accept the will of the people."
He said Somaliland, a former British protectorate in the north of Somalia, would not stop seeking world recognition.
"I say to the people of Somaliland that our efforts (to achieve recognition) will not end. Even if Somaliland stands alone for 100 years, and we have not achieved recognition, then we will continue to strive for that goal, god willing."
Whereas Somalia proper has been mired in violence since the 1991 ouster of president Siad Barre, Somaliland has enjoyed relative stability.
Interior minister Mohamed Abdi Gabose told AFP he was happy for Somaliland and its citizens.
"The citizens believe they have done enough. Now we are looking to the international community.
"With patience and with energy, Somaliland is going in the right direction. Somaliland is an island in the middle of a chaotic and unstable region, and we just want to live peacefully with our neighbours."
The independence day celebrations were attended by an official delegation from neighbouring Djibouti, the only official foreign representation in attendance.
The head of the Djibouti team, Ougoureh Kifle Ahmed, said formal recognition of Somaliland was a possibility, especially in light of the impending division of Sudan into two distinct countries.
"The door is open to all possibilities for the modification of former boundaries," he told AFP.
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