MOGADISHU (SD) – The World Bank and the International Monetary Fund (IMF), through the International Development Association (IDA) that provides concessional loans and grants for development, have agreed with Somalia to cancel its debts.

This decision came after the successful completion of the program designed to help heavily indebted poor countries (HIPC), following the Somali government’s achievements in the last ten years.

The significant decision will reduce Somalia’s external debt, which stood at 64% of the country’s GDP in 2018, to below 6% by the end of 2023.

Debt relief or restructuring efforts involved various creditors, including the IMF, IDA, the African Development Fund (ADF), and other institutions.

President of the Federal Republic of Somalia, Dr. Hassan Sheikh Mohamud, expressed satisfaction with the government’s efforts over the past decade, which have brought the country to this milestone.

Additionally, the Minister of Finance of the Federal Government of Somalia, Mr. Biixi Iimaan Cige, highlighted the efforts made to stabilize the national economy, which included domestic revenue mobilization, improving fiscal management, and strengthening the capacities of government institutions.

The minister emphasized that these achievements were made despite challenges such as climate change and conflicts affecting security.

The IMF and the World Bank praised the country’s commitment to meeting the conditions of the Heavily Indebted Poor Countries (HIPC) initiative, especially during challenging times such as the COVID-19 pandemic and security threats.

IMF Middle East and Central Asia Director, Jihad Azour, commended Somalia’s progress after years of conflict and political efforts, while the Deputy Head of the World Bank for East and Southern Africa, Victoria Kwakwa, affirmed support for the economic recovery that contributes to poverty reduction.

The Somali government is now focused on sustaining economic progress following the completion of the HIPC program, utilizing the knowledge gained and continued collaboration with the World Bank and the IMF. The World Bank will continue to support Somalia’s economic development and the rebuilding of government institutions over the next five years.

Somalia’s debt relief marks the 37th country to complete the HIPC initiative since its inception in 1996. This success not only signifies an economic transformation in Somalia but also serves as an example of international cooperation in addressing global poverty.