Somalia’s longstanding external debts cancelled

NY December 14, 2023 (QJ) -The World Bank and the International Monetary Fund (IMF) have jointly announced a significant and coordinated decision to cancel Somalia’s longstanding external debts, accumulated over many years due to persistent challenges and stringent conditions imposed on the country.

In a joint press release issued by the IMF and the World Bank, it was revealed that debt relief for Somalia amounts to $4.5 billion. This debt cancellation is expected to ease the economic burden on Somalia, facilitating the acquisition of crucial financial resources to boost economic development, alleviate poverty, and create employment opportunities.

The statement emphasized that the debt relief initiative would contribute to enhancing Somalia’s economic knowledge, playing a pivotal role in the country’s economic progress, poverty reduction, and job creation.

The debt relief program for Somalia commenced in 2012 and formally began implementation in 2016. Despite facing numerous challenges, Somalia has achieved notable successes in governance and state-building. Recently, the country marked its third consecutive successful review under the Heavily Indebted Poor Countries (HIPC) initiative, with the government meeting key benchmarks.

The press release also highlighted Somalia’s ability to meet the requirements of the Multilateral Debt Relief Initiative (MDRI), indicating the government’s commitment to economic reforms and financial stability. Additionally, it mentioned Somalia’s accession to the African Development Fund (ADF), demonstrating the country’s progress in international economic cooperation.

This significant development reflects the ongoing efforts of the Somali government, with support from international financial institutions, to rebuild and stabilize the country’s economy after years of conflict and economic challenges.