The Executive Boards of World Bank and International Monetary Fund (IMF) announced that Somalia is eligible for debt relief after carrying out a raft of economic and institutional reforms.
Somalia owes external debtors over $5 billion. The United States is the biggest single lender to the Horn of Africa nation, which owes it close to $1 billion.
World Bank and IMF’s Executive Boards met on February 12 and 13. Part of their discussions focused on Somalia’s eligibility.
The two financial superpowers determined that the East African nation was eligible for debt relief because of the Heavily Indebted Poor Countries (HIPC) Initiative.
Worldwide, countries can only be eligible for the HIPC Initiative upon committing to economic and financial reforms and once they commit to eradicate poverty.
Kristalina Georgieva, IMF Managing Director, hailed Somalia for a decision that it labeled “historic.”
David Malpass, the President of the World Bank, said, “Today marks an important step that Somalia has made towards accessing financial help from international financial institutions.”