Relief for Somalia as Paris Club creditor nations cancel 99 per cent of debt
This move positions Somalia on a path towards financial stability and economic revitalization.
Somalia has successfully secured the cancellation of a staggering 99 per cent of its debt owed to members of the Paris Club of Creditor Nations, marking a crucial milestone in the country's efforts to reintegrate into the international financial system.
On Wednesday, the Paris Club, a body affiliated with the French finance ministry serving as a secretariat for numerous creditor countries, announced that major nations such as the United States, Japan, and Russia had collectively forgiven over $2 billion of Somalia's debt.
More To Read
- Ghana will not quit IMF deal but wants changes, says president-elect John Mahama
- IMF cautions Kenya’s financial stability amid plans for Sh194 billion UAE loan
- IMF warns Kenya over further interest rate cuts, citing risks to economic stability
- Kenya seeks Sh37.6 billion IMF funds cut citing lower financing pressures
This substantial debt relief comes after Somalia became eligible for more than $4.5 billion in debt forgiveness following the successful conclusion of a debt forgiveness initiative overseen by the International Monetary Fund (IMF) and the World Bank in December.
Having reached the "Completion Point" of the Heavily Indebted Poor Countries Initiative (HIPC), Somalia has emerged from over 30 years of international financial isolation, a period marked by instability and civil war.
The Paris Club expressed its satisfaction, stating, "Paris Club creditors welcomed the Federal Republic of Somalia's determination to continue implementing a comprehensive poverty reduction strategy and an ambitious economic reform programme, laying the foundations for sustainable, inclusive economic growth."
According to the IMF and World Bank, Somalia's external debt, which stood at $5.3 billion, is projected to shrink to less than 6 per cent of its gross domestic product by the end of 2023, a substantial reduction from the 64 per cent recorded at the close of 2018.
This move positions Somalia on a path towards financial stability and economic revitalization.
Top Stories Today
