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Somalia’s President Hassan Sheikh Mohamud is ecstatic about the developments. He said that the loan would help Somalia to move forward and reform the laws, policies, and practices, apart from following a pragmatic debt relief policy.
A debt relief of US$4.5 billion from international creditors- the International Monetary Fund (IMF) and the World Bank -is greeted by the citizens and the government authorities in Somalia. Ordinary citizens are elated since they believe that the large concessional loan from various multilateral agencies can change the economic profile of the impoverished country in the Horn of Africa.
The green light comes as Somalia reached the “completion point” of the Heavily Indebted Poor Countries Initiative (HIPC), the IMF added in a statement. The US Treasury Department added in a separate statement recently that Washington intended to cancel 100 percent of its remaining claims, bringing the total amount of U.S. debt relief for Somalia under HIPC to around US$1 billion to rebuild the economy of the country.
Somalia’s President Hassan Sheikh Mohamud is ecstatic about the developments. He said that the loan would help Somalia to move forward and reform the laws, policies, and practices, apart from following a pragmatic debt relief policy.
Somalian economy was almost destroyed on account of the lop-sided economic policies and heavy debt burden. Somalia has not officially issued banknotes for about 32 years. It now can have functional bank notes to move in the development value chain. Over the years, the Somalian economy has progressed as the data reveals. Its external debt has fallen from 64 percent of gross domestic product in 2018 to less than six percent of GDP by the end of 2023. The East African nation is highly impoverished as 70 percent of its population lives on less than $1.90 a day according to the World Bank.
Read also:
https://trendsnafrica.com/somalia-to-get-us-3-4-billion-from-lending-agencies/
https://trendsnafrica.com/somalia-joins-eac-set-to-integrate-countrys-economy-with-other-members/
Analysts opine that the focus of the West and multilateral lending organizations is a strategy to win over African countries at a time when China and Russia are making heavy inroads into Africa. Some of the traditional allays of the West like Mali, Burkina Faso, and Niger are distancing from the West and have become votaries of Russia and China.
