Mon. Apr 15th, 2024

Several countries have agreed to cancel more than $2bn (£1.5bn) of debt owed to them by Somalia.

The Paris Club which includes the US, Japan and Russia wrote off almost all the money it was owed after Somalia reached the end of a debt forgiveness initiative overseen by the International Monetary Fund and World Bank.

Somalia has in turn committed to prioritise poverty reduction by investing in health, education and basic infrastructure.

“Achieving full debt relief will transform Somalia’s future and allow our government to create fiscal space for basic public services,” Finance Minister Bihi Egeh shared on X, formerly Twitter.

Somalia’s conclusion of the IMF and World Bank Enhanced Heavily Indebted Poor Countries (HIPC) debt forgiveness initiative last December made the country eligible for $4.5bn ($3.5bn) worth of debt forgiveness.

Achieving the full $4.5bn debt relief will slash the country’s external debt from 64% of its GDP in 2018 to just 6%.

Somalia had been exiled from the global financial system for more than three decades following years of civil war and militant threats.

By Joy

Leave a Reply

Your email address will not be published. Required fields are marked *