Somalia reduces national debt by 58% in 5 years
Somalia has made remarkable strides in the reduction of its national debt by over 50% within a period of 5 years.
The country achieved this under the leadership of ex-President Mohamed Farmaajo and President Hassan Seikh Mohamud who took over in 2022.
The East African country which was to end its programme under the International Monetary Fund (IMF) and the World Bank’s Highly Indebted Poor Countries programme on December 13, 2023 is expected to get debt relief from the international lenders.
This leaves Somalia’s external debt at six (6) percent of GDP from the sixty-four (64) percent in 2018.
The relief was made by commercial creditors ($3 billion), followed by multilateral creditors ($573.1 million), World Bank’s International Development Association ($448.5 million), IMF ($343.2 million) and African Development Fund ($131 million), according to The East African.
The announcement will be made in Washington DC on December 13 after the approval process is completed by the Bretton Woods institution.
This makes Somalia the 37th country to reach the HIPC completion point.
The HIPC initiative was created by the IMF and World Bank in 1996 to assist poor countries owing unmanageable debt burdens to clear their debts and reduce economic constraints.
