2023-12-13 18:44:00
Somalia will benefit from a $4.5 billion debt reduction plan from international creditors, relating to its debt service, the International Monetary Fund (IMF) announced in a press release on Wednesday.
“Somalia’s debt relief process is the result of intergovernmental efforts spanning three political administrations for almost a decade. This demonstrates our national commitment and the priority given to this crucial and enabling program,” he said. Somali President Hassan Cheikh Mohamoud is congratulated in this press release.
This debt relief for Somalia was approved on Wednesday by the boards of directors of the IMF and the International Development Association (IDA-IDA), the World Bank agency that lends to the poorest countries. It was carried out under the Heavily Indebted Poor Countries (HIPC) Initiative.
The reduction in debt service (or interest on these loans) was provided for $343.2 million by the IMF, for $448.5 million by the IDA, for $131 million by the African Fund development (FAD).
Other multilateral creditors participated for $573.1 million as well as, for $3 billion, bilateral creditors and organizations, such as members of the Paris Club.
The IMF and other institutions say they have “determined that Somalia has made satisfactory progress in meeting the necessary requirements to reach the HIPC completion point.”
Somalia has implemented a poverty reduction strategy for at least a year and has maintained good macroeconomic management, the IMF estimates.
Somalia, a country in the Horn of Africa with around 17 million inhabitants, has been facing torrential rains since the beginning of October caused by the El Nino climatic phenomenon which have displaced at least a million people. and left more than 100 dead.
The country has also faced several episodes of historic drought in recent years which have decimated livestock.
Since 2007, Somalia has also been facing an insurgency by radical Islamists Shebab, a group affiliated with Al Qaeda. After notable progress, the offensive launched by the Somali authorities has stalled in recent months.
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