Somalia Secures $4.5 Billion Debt relief from world lenders

Somalia has achieved a momentous breakthrough on its decade-long journey to financial recovery, securing a remarkable $4.5 billion debt write-off from global lenders. The debt relief comes as Somalia integrates into the East African Community (EAC) following its admission just two weeks ago.

The enhanced Heavily Indebted Poor Countries Initiative has granted Somalia exemption from debt repayment.
This landmark decision by major lenders, including the World Bank and International Monetary Fund (IMF), substantially reduces Somalia’s debt from $5.2 billion to $600 million, dropping its external debt to less than six percent of GDP from 64 percent in 2018.
The debt forgiveness, set to be officially announced in Washington DC on December 13 after approval by Bretton Woods institutions boards, positions Somalia as the 37th country to reach the HIPC completion point, following Sudan and Zimbabwe.
Somalia’s commitment to reforms, despite political challenges, has been lauded by the World Bank.
The debt write-off opens an opportunity for Mogadishu to move beyond three decades of conflict and fragility, fostering economic reconstruction, poverty reduction, and inclusive growth.
It is anticipated to unlock concessional and climate financing, restore investor confidence, and reintegrate Somalia into the global financial system, catalyzing a new chapter in its economic trajectory.