The United States and Somalia reached a significant debt-relief agreement on Tuesday, with Washington cancelling more than $1 billion owed by the East African nation. The deal was signed by Somalia’s Finance Minister Bihi Egeh and US Ambassador Richard Riley, marking the largest single portion of Somalia’s international debt relief package under the IMF-World Bank agreement.
This agreement follows Monday’s approval of a $1.36 billion national budget by Somalia’s parliament. Somalia has struggled with decades of conflict, terrorism, and climate disasters.
Ambassador Riley described the event as a great day, explaining that the US-Somalia agreement removes $1.14 billion in debt and is part of a larger, multi-national relief plan that has cancelled over $4.5 billion of Somalia’s debt. The US Embassy noted that this debt relief accompanies $1.2 billion in US aid provided to Somalia this year.
In response, Finance Minister Egeh expressed gratitude on social media, acknowledging the US’s “unwavering support” for Somalia’s economic reforms. The debt relief follows years of reform efforts by Somalia, which has improved its financial management and accountability.
Somalia’s budget anticipates economic growth, forecasting an increase to 3.9% in 2025, though grain supply disruptions and recent drought could pose challenges.