The International Monetary Fund (IMF) is gearing up for a crucial meeting in Washington on December 13, poised to conclude the protracted process of relieving Somalia’s staggering $3.3 billion debt, constituting 40% of its GDP.
Having reached the ‘decision point’ in 2020 under the Heavily Indebted Poor Countries Initiative (HIPC), Somalia now stands at the ‘completion point,’ targeting a capped debt of $550 million.
Somalia has met most criteria outlined in the IMF’s governance grading policy, encompassing facets like poverty reduction and fiscal policy.
However, a potential hurdle looms as Mogadishu grapples with harmonizing port duty collection procedures, hindered by the reluctance of certain federal states, notably Puntland, governed by Said Deni, asserting autonomy.
Months of negotiations and bilateral agreements culminated in Somalia achieving the completion point, with Russia granting $684 million in debt relief during the Russia-Africa Summit.
Concurrently, the IMF board is anticipated to greenlight a new extended credit facility of $100 million during the December 13 meeting, disbursed over the next three-and-a-half years.
This milestone signifies a pivotal step towards alleviating Somalia’s debt burden and fostering economic stability.
