The government in Somalia has hosted celebrations in the capital, Mogadishu, following the announcement by the International Monetary Fund (IMF) and the World Bank of $4.5 billion ($3.5 billion) in debt relief for the country.
Prime Minister Hamza Abdi Barre expressed the significance of the relief, stating that it is equivalent to relieving every Somali person of a debt of more than $300. He emphasised that this development is a testament to Somalia’s financial viability, its appeal to foreign investment, and its escape from the burden of debt.
The debt relief was granted under the Heavily Indebted Poor Countries (HIPC) programme, established in 1996 to assist economically challenged nations burdened by unsustainable debt levels. The $4.5 billion relief encompasses forgiveness from various multilateral, bilateral, and commercial creditors.
In a joint statement, the IMF and the World Bank noted that Somalia’s external debt has fallen from 64% of GDP in 2018 to less than 6 percent of GDP by the end of 2023.
Prime Minister Barre underscored the monumental impact of the relief, highlighting that it will empower the country to invest in development programmes, stimulate economic revitalisation, and facilitate borrowing from international lending institutions. This financial respite marks a crucial step forward for Somalia’s economic prospects and opens doors for a brighter future.