THE AFRICA BAZAAR STAFF
February 26, 2020
Two of the world’s major international finance institutions Wednesday said they have secured sufficient financial pledges from their members to help Somalia obtain debt relief through the Heavily Indebted Poor Countries program.
The African Development Bank’s President Akinwumi Adesina and the International Monetary Fund‘s Managing Director Kristalina Georgieva, respectively made the announcement.
A total of $456.25 million has been approved to help clear Somalia’s arrears.
The IMF secured more than US$334 million (SDR 242 million) in financial pledges from over 100 IMF member countries, while the AfDB and African Development Fund agreed to give $122.55 million from its purse to clear the arrears.
Getting rid of the arrears will allow Somalia to move forward with its development and “will help unlock significant new amounts of development assistance and pave the way for higher and more inclusive growth.”
“It is a historic day for us as a Bank. I think collectively we should be very proud of what has happened [and] the sacrifices of the Somali,” AfDB’s President Akinwumi Adesina said in a statement.
Somalia’s Finance Minister Dr. Abdirahman Beileh, said the AfDB “has accompanied Somalia through the difficult reforms, which can only make Somalia a better place for all Somalis. We are committed to continuing our reforms as we have seen their benefits to our governance systems and capacity to manage our economy, and, more importantly, to improving government accountability to the people.”
Once all the pledges are formalized, 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.
Ms. Georgieva applauded the financing breakthrough, noting, “today’s financing milestone opens up a historic opportunity for Somalia to move toward comprehensive debt relief from the IMF and the international community. We are firmly committed to supporting Somalia in its recovery after a long period of conflict and devastation.”
The Managing Director also offered her gratitudes to the IMF’s member countries for their generous support, acknowledging the cooperative efforts of the IMF’s member countries from around the world, including many lower-income economies, as well as the strong supports from the World Bank, AfDB, Paris Club, European Commission, and other development partners, which contributed to the multilateral initiative.
“This marks a clear recognition by our members for Somalia’s strong and sustained commitment to economic and financial reforms, despite very challenging circumstances. This takes Somalia one step closer to the HIPC Decision Point, which will significantly reduce Somalia’s total debt and enable access to new resources to jumpstart growth and begin reducing poverty,” Ms. Georgieva said.
