MOGADISHU, Somalia – The International Monetary Fund has said Somalia’s authorities have done almost everything needed to secure an agreement to significantly cut the country’s foreign debt.
The government and the Central Bank of Somalia have spent several years negotiating with creditors to agree on a “completion point” under the Heavily Indebted Poor Countries (HIPC) initiative.
The IMF said if Somalia achieved the completion point, its foreign debt would fall to $600 million, from $5.2 billion at the end of 2018.
Clearing Somalia’s arrears and securing comprehensive debt relief are critical in regaining access to concessional financing from both multilateral and bilateral development agencies.
As one of the world’s poorest and most indebted countries, Somalia would most likely meet the eligibility requirements of the Heavily Indebted Poor Country (HIPC) Debt Relief Initiative and the Multilateral Debt Relief Initiative (MDRI).
Laura Jaramillo, who led the IMF staff, said the challenge notwithstanding, Somalia has met nearly all the conditions needed to qualify for the full debt relief and lenders have already agreed to remission of up to 76.8 percent of Somalia’s total debt, but more needs to be done.
Source: Shabelle Media Network + centralbanking
