São Paulo – The World Bank and the International Monetary Fund (IMF) announced this Wednesday (13), in Washington D.C., a USD 4.5 billion debt relief for Somalia. These debt savings are part of the Heavily Indebted Poor Countries (HIPC) program, which relieves nations of up to 100% of their debt with the IMF, the World Bank, and the African Development Fund (ADF). In the case of Somalia, according to the institutions’ statement, the country’s debt was reduced from the equivalent of 64% of its Gross Domestic Product (GDP) to 6% of this year’s GDP (pictured above, the Somali capital, Mogadishu).
In the release, the president of Somalia, Hassan Sheikh Mohamud, said the debt relief results from reforms implemented in the economy. “Somalia’s debt relief process has been nearly a decade of cross-governmental efforts spanning three political administrations,” he said.
In another statement about the country, the IMF said it had completed the sixth and final review of its Extended Credit Facility (ECF), a program that guarantees financial assistance to low-income countries with payment balance issues. Under this program, the Fund disbursed the equivalent of USD 9.3 million to Somalia and said it is considering a new three-year arrangement for a total of USD 100 million.
IMF’s deputy managing director and acting chair, Antoinette Sayeh, noted local authorities were committed to implementing reforms, rebuilding the Somali economy, and overcoming the challenges the country is facing, including climate, economic, social, and security risks.
Translated by Elúsio Brasileiro
