Mogadishu, Somalia – The African Development Bank Group (AfDB) has announced further debt relief for Somalia, enabling complete
cancellation of all African Development Fund loans to the nation for the 2024-2039 period.
The financial institution stated that this decision comes after Somalia made significant strides in macroeconomic reforms, public financial management,
domestic revenue mobilization, and governance.
“Debt relief creates opportunities for stronger institutions, improved services, and better prospects for Somali citizens, with positive effects seen in classrooms, clinics, farms, and markets throughout the nation,” AfDB Lead
Operations Advisor for Somalia, Bubacarr Sankareh, mentioned in a statement released on Wednesday.
According to AfDB, Somalia has fulfilled its poverty reduction commitments by enhancing basic service delivery and extending safety nets for vulnerable
households.
The bank indicated that the debt relief, which follows the successful completion of the Enhanced Heavily Indebted Poor Countries Initiative (EHIPC) process, will cut
Somalia’s external debt by $17.68 million U.S. dollars. Established in 1996 by the World Bank Group, the initiative seeks to reduce
unsustainable debt burdens for qualifying countries that meet specific criteria and commit to poverty reduction strategies, allowing them to concentrate on
economic growth and poverty alleviation.
It mentioned that the Somali government intends to redirect resources toward funding public services, infrastructure rehabilitation, and essential social
programs.
“Additional funds will be allocated to increase teacher recruitment, promote clean water access, and expedite health system recovery in areas impacted by drought and conflict. This debt relief will also enhance economic resilience,” it stated.
This action will also boost Somalia’s creditworthiness, rebuild trust among development partners, and unlock favorable financing for long-term reconstruction.
