For decades, Somalia has been unable to borrow funds from international partners. That has been because of the decade-long civil war, emergence of Al-Shabaab to threaten stability and security in the country, and a poor economy.
However, that now looks to be in the past after the Horn of Africa nation paid off its World Bank debt. Norwegian government allowed the East African nation to access a bridge loan worth $365.9 million. It used the funds to settle money it owed the Bretton Woods institution.
Furthermore, reports from Mogadishu and the World Bank indicate that the Federal Government of Somali will use the money to pay its arrears to the African Development Bank (AfDB) and International Monetary Fund (IMF).
In a press statement, World Bank said, “By settling its debt, Somalia fully reestablishes its access to fresh financial resources from IDA. Moreover, it now paves the way for receiving debt relief under the Heavily Indebted Poor Country and Multilateral Debt Relief Initiative.”
Access to new funds increases Somalia’s ability to pursue the growth the country craves. It also enables the nation to embark on economic recovery. It is also proof that the East African country now enjoys more investor confidence.