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The Executive Boards of the IMF and the International Development Association (IDA), the World Bank agency that lends to the poorest countries, approved the debt relief. It was carried out under the Heavily Indebted Poor Countries (HIPC) Initiative.
The IMF said that Somalia will get a US$4.5 billion debt reduction plan with international creditors to service its debt.
Somali President Hassan Sheikh Mohamoud said the debt relief is a testimony to the country’s national commitment and the priority assigned to the development programs. The Executive Boards of the IMF and the International Development Association (IDA), the World Bank agency that lends to the poorest countries approved the debt relief. It was carried out under the Heavily Indebted Poor Countries (HIPC) Initiative. Debt service reduction (or interest on these loans) was provided by the IMF to the tune of US$343.2 million, IDA to the tune of US$448.5 million, and the African Development Fund (ADF) to the tune of US$131 million. Other multilateral creditors contributed US$573.1 million, and bilateral creditors and agencies, such as members of the Paris Club, contributed most of the funds, US$3 billion.
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The IMF and the other institutions state that they have determined that Somalia has made satisfactory progress toward meeting the requirements necessary to reach the HIPC completion point. The IMF added that Somalia had been implementing a poverty reduction strategy for at least a year and had maintained good macroeconomic management. Somalia is a country in the Horn of Africa with a population of around 17 million. The country is in the grip of insurgency. It had to cope with torrential rains caused by the El Nino weather phenomenon since the beginning of October, displacing at least one million people and killing more than 100. Drought and insurgency took their toll on the country lying in the Horn of Africa region. The country has been in turmoil since 2007.
In the meantime, President of Somalia Hassan Sheikh Mohamud said recently at a conference in New York that it is time for Somalia to take up full responsibility for its security. The achievement of this objective will not only benefit Somalia, but it will also contribute to regional and global peace and stability,” said Mohamud at the Somalia Security Sector Conference in New York.
The President of Somalia told delegates that the drawdown of ATMIS (African Transition Mission in Somalia) was a testament to the progress we’ve made together in building a more stable Somalia with a stronger security apparatus working towards transitioning full security responsibilities to Somali forces. Mohamud said in his address to the conference that hundreds of al-Shabab-related bank accounts have been frozen as a result of the country’s anti-money laundering and countering financing terrorism policies.
