Multiple nations, including the US, Japan, and Russia, have collectively decided to waive over $2 billion of debt owed by Somalia.
The Paris Club, comprising these countries, has largely forgiven the outstanding debt as Somalia successfully completed a debt relief program supervised by the International Monetary Fund and World Bank.
In return, Somalia has pledged to focus on poverty alleviation by directing resources towards healthcare, education, and essential infrastructure development.
“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.
