IMF secures pledges for Somalia debt repayment

The International Monetary Fund (IMF) said it has secured sufficient financial pledges to provide 334 million U.S. dollars in debt relief to Somalia.

The IMF said in a statement issued on Wednesday evening that more than 100 IMF member countries have pledged toprovide more than 334 million U.S. dollars in financing to provide comprehensive debt relief to Somalia.

“This marks a clear recognition by our members for Somalia’s strong and sustained commitment to economic and financial reforms, despite very challenging circumstances,” IMF managing director Kristalina Georgieva said in the statement.

“This takes Somalia one step closer to the HIPC (Heavily Indebted Poor Countries) Decision Point, which will significantly reduce Somalia’s total debt and enable access to new resources to jumpstart growth and begin reducing poverty,” she added.

According to the lender, once all pledges are formalized, a process will be followed of clearance of arrears to the fund and new fund financing that will enable the delivery of HIPC Initiative and other debt-relief to Somalia.

The IMF said the pledges will help unlock significant new amounts of development assistance and pave the way for higher and more inclusive growth.

“We are firmly committed to supporting Somalia in its recovery after a long period of conflict and devastation,” Georgieva said.

According to the IMF, Somalia’s external debt is about 5.3 billion U.S. dollars, but Mogadishu has not made a service or amortization payment since the onset of the civil war two decades ago, making it impossible to access loans from the IMF.

Both the IMF and the World Bank said on Feb. 13 that a final decision or decision point on debt forgiveness may be realized by the end of March