After months and years of monitoring by World Bank and International Monetary Fund (IMF) under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative, Somalia has finally received its debt relief.
The two Bretton Woods Institutions determined the Horn of Africa nation as eligible for debt relief. This happened after the government of President Mohamed Farmaajo initiated several radical financial reforms.
The international lenders approved the reforms. On Wednesday, they approved Somalia’s debt relief status. In the process, they made the East African country the 37th nation in the world to reach the milestone known as HIPC Decision Point.
With this new development, Somalia will see its debt, which stood at $5.2b on December 31, 2018, reduced to $557m only. For this to happen, though, the country would have to get to the HIPC Completion Point within the next three years.