IMF gives $5bn to Somalia in huge debt assistance as country reforms economy

IMF gives $5bn to Somalia in huge debt assistance as country reforms economy
Somalia's debt has been slashed as the IMF approved a multi-billion dollar package of assistance.
2 min read
27 March, 2020
With this initiative, Somalia's debt will be reduced to $557m over three years [Getty]

Somalia's debt is going to be cut following unprecedented support in billions of dollars by the International Monetary Fund and World Bank.

A sum of almost $5bn (£4.1bn) of assistance was approved this week, and a joint statement made by global financial institutions praised the country’s “dedication” to economic reform.

"The journey leading to this decision required hard work, dedication and partnership," said Prime Minister Hassan Ali Khayre.

"This decision is an important milestone, which presents ample opportunities for Somalia as it relentlessly pursues its ongoing reform processes as well as its recovery and development agenda."

With this initiative, Somalia's debt will be reduced from $5.2bn to $557m over a period of three years, in a cash injection that seeks to reform the country’s finances.

Before Somalia could qualify, it had to make sweeping economic reforms to reduce poverty and debt.

Read More: Cancelling the Hajj? How conflict, disease often stopped pilgrimage to Mecca long before the coronavirus

“Work must continue to sustain and expand the implementation of these reforms as Somalia starts a new chapter of its history. I am confident a more resilient and prosperous future lies ahead for the people of Somalia,” said the IMF's managing director, Kristalina Georgieva.

"The government will have more resources for social services; banks and business will have easier access to credits and investments," the EU's ambassador to Somalia, Nicolas Berlanga, tweeted.

Somalia in recovery?

Qatar is building a new embassy in the country's capital of Mogadishu in a move the signals the latest move by foreign powers to support Somalia’s capital following violent conflict.

It will be the second largest embassy in Somalia after the Turkish Embassy.

The Director of Planning and International Relations at the Ministry of Information in Somalia, Abdirahman Ahmed shared the news on his official Twitter account.

Qatar Fund for Development invested in a range of development projects in Somalia in 2019; including donating 68 armoured vehicles last year and airlifting victims of an Al-Shabab terrorist attack from Mogadishu to Doha for medical treatment last month.

Follow us on FacebookTwitter and Instagram to stay connected