The Norway government has pardoned the Somali government for over 1.8 million USD, a move that could help Somalia to reduce international debt.
In a statement, Minister of Foreign Affairs Ine Eriksen Søreide said under a bilateral agreement between Norway and Somalia, NOK 16.2 million of Somalia’s debt to Norway will be cancelled.
The minister said Some 67 % of Somalia’s debt to Norway, NOK 10.85 million, will be cancelled upon the signing of the bilateral agreement, in line with the Paris Club agreement with Somalia.
“By waiving Somalia’s debt to Norway, we are promoting sustainable development, stability and poverty reduction in one of the world’s most vulnerable countries,” the minister said.
Norway also pledged the remaining NOK 5.35 million will be cancelled if and when Somalia reaches its Completion Point under the Heavily Indebted Poor Countries (HIPC) Initiative.
According to the statement, It is expected to do so in 2023.
In order to reach its HIPC Completion Point, Somalia will have to implement a number of economic measures and reforms, so that the remainder of its debt to the Paris Club creditor countries can be cancelled. In the meantime, Somalia’s debt service obligations will be very low.
