Monday September 28, 2020
MOGADISHU (HOL) - Somalia has signed a debt restructuring pact with the US that that will see it eventually forgiven up to $1 billion.
The agreement was signed Sunday in Mogadishu by US ambassador to Somalia Donald Yamamoto and Finance Minister Abdirahman Beyleh.
“Signing this agreement was possible because Somalia has implemented significant economic reforms in recent years and in March 2020 reached the first stage of debt relief, known as “Decision Point,” through the Heavily Indebted Poor Countries Initiative,” a statement from the US embassy in Mogadishu read in part. “When Somalia reaches the final stage, “Completion Point,” the United States will have forgiven more than $1 billion in debt.
The US is the single most bilateral creditor to Somalia having loaned the Horn of African up to $1 billion which are now in arrears.
Somalia reached the decision point under the HIPC initiative early this year opening doors for limited grants access through the World Bank’s International Development Association (IDA) financing facility.
Once the country reaches the Completion Point, it will have been forgiven virtually all the $5.4 billion debt.