Somalia expects to get debt remission in early next following a staff-level agreement between the horn of Africa nation and the international Monetary Fund staff.
In a statement on Monday, the global financial institution said the deal will allow the release of about $10 million to the East African country, once approved by the board.
IMF mission chief Laura Jaramillo praised authorities for sticking to economic reforms despite a prolonged drought, the impact of Russia’s war in Ukraine and continued security concerns.
Somalia could reach the completion point of the Heavily Indebted Poor Countries (HIPC) global debt forgiveness process by late 2023, if the horn of Africa nation speeds up progress on reforms,
The debt remission would allow Somalia to pare its debt to around $550 million from $5.2 billion.
“That would be a tremendous milestone,” Jaramillo said, noting it would reduce Somalia’s debt to around 7% of gross domestic product from around 90% now.
