IMF Announces Somalia’s Progress Towards Full Debt Relief by December

Somalia is poised to attain complete debt relief from the International Monetary Fund (IMF) and other financial institutions in December of this year, following substantial efforts to enhance domestic revenue collection and transparency in the management of public finances.

In the wake of the most recent evaluation of Somalia’s performance under the Extended Credit Facility arrangement, the IMF has commended the Horn of Africa nation for making significant strides in implementing the recommended reforms aimed at revitalizing its economy, despite grappling with various challenges.

Laura Jaramillo, who led the IMF staff, acknowledged the hurdles faced by Somalia but highlighted that the country has largely met the requisite conditions for full debt relief. Lenders have already consented to a reduction of up to 76.8 percent of Somalia’s total debt, though further actions remain imperative.

The anticipated full debt relief will alleviate Somalia’s loan burden, reducing it to $557 million, equivalent to approximately 10 percent of its gross domestic product, from the current level of $3.3 billion. This substantial reduction will provide Somalia with the fiscal capacity to address the myriad impediments hampering economic growth and development.