By Mohamed Dhaysane
MOGADISHU, Somalia (AA) - The IMF and World Bank’s International Development Association (IDA) announced that it approved a debt relief of $4.5 billion for Somalia under the program of the Heavily Indebted Poor Countries Initiative.
Debt service relief has been provided by the IMF, the African Development Fund, other multilateral creditors as well as by bilateral and commercial creditors, according to a joint statement by IMF and the World Bank.
“This is a testament to Somalia’s unwavering commitment to economic reforms. The IMF will continue to build on our strong partnership with Somalia,” IMF Managing Director Kristalina Georgieva said.
Somalia's President Hassan Sheikh Mohamud welcomed the debt relief, saying: "Somalia’s debt relief process has been nearly a decade of cross-governmental efforts spanning three political administrations. This is a testament to our national commitment and prioritization of this crucial and enabling agenda."
The Heavily Indebted Poor Countries Initiative was established to create a framework in which all creditors, including multilateral creditors, can provide debt relief to the world's poorest and most heavily indebted countries to ensure debt sustainability, reduce the constraints on economic growth and poverty reduction imposed by the unsustainable debt service burdens.
Somalia is the 37th country to reach Completion Point under the HIPC Initiative.
The debt relief saw Somalia’s external debt to have fallen from 64% of GDP in 2018 to less than 6% of GDP by end-2023.