The International Monetary Fund and the World Bank agree to exempt Somalia from debts worth $4.5 billion

The International Monetary Fund and the World Bank agree to exempt Somalia from debts worth $4.5 billion

 The International Monetary Fund and World Bank agreed to forgive $4.5 billion in debt for Somalia on Wednesday after the Horn of Africa country completed years of financial reforms under the Heavily Indebted Poor Countries Initiative.

The IMF and World Bank launched this initiative in 1996 to help the world's poorest countries achieve debt sustainability. The IMF and World Bank said in a statement that debt relief “will facilitate access to vital additional financial resources that will help Somalia strengthen its economy, reduce poverty and enhance job creation.”

The statement added: “After the Heavily Indebted Poor Countries (HIPC) completion point, Somalia’s external debt fell from 64 percent of GDP in 2018 to less than 6 percent of GDP by the end of 2023.”

The Somali government welcomed the debt relief, and the President of the Republic, Hassan Sheikh Mohamud, congratulated the Somali people on the historic achievement achieved by the country after being exempted from debts that had been an obstacle for a long time.

He said: “I am very happy that we have begun the debt relief process, and today I am lucky to be standing at the end of it.” The president stressed that the country now has the ability to interact with the world and that the country’s financial institutions and banks have been recognized, describing this success as a great opportunity.

For his part, Prime Minister Hamza Abdi Barre described what happened as a historic victory for the Somali nation, and stated that debt relief was achieved thanks to the hard work done by successive governments, indicating that debt relief will lead to economic development, attracting investors, achieving self-sufficiency and improving services. Social and creating hope for Somali youth.