Somalia is set to receive significant relief from its international debts, allowing a country battered by civil war, terrorism, and near economic bankruptcy to rejoin the global financial system after an absence of some 30 years. Total relief of $4.5 billion, to be announced on Wednesday under the IMF’s Heavily Indebted Poor Countries initiative, would slash Somalia’s debt as a proportion of gross domestic product from 65 percent to about 6 percent. This marks what the IMF has called “a major milestone” in the revival of one of the world’s most troubled nations. The Horn of Africa nation shattered into clan warfare after the fall of the communist government of Mohamed Siad Barre in 1991 and a failed US attempt to stabilise the country. This ended with the 1993 shooting down of three US helicopters in what became known as the Black Hawk Down incident.
For the past 15 years, successive governments in Mogadishu, which have held only tenuous sway over a divided country, have been fighting an Islamist insurgency led by the Al-Shabaab militant group. Thousands have died in raids and explosions, while the militants have also launched attacks on neighbouring countries, including Kenya in 2013, when 71 people died in an assault on Nairobi’s Westgate mall. The current government of Hassan Sheikh Mohamud, who returned as president for a second stint in 2022, claims to have made progress in suppressing Al-Shabaab, but now faces one of Somalia’s worst droughts in living memory.
Officials close to Sheikh Mohamud said the debt-relief deal would be a turning point and was an endorsement of the administration’s progress in tackling the country’s deep-seated economic and political problems. The conclusion of debt relief would allow Somalia to access concessional loans, a senior official in the president’s office told the Financial Times this week. A $100 million three-year IMF programme concluded last month would ensure continued progress with economic reform, eventually paving the way to sustained growth, he said..
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Sources: Financial Times
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Xafiiska Wararka Qaranimo Online | Mogadishu, Somalia
_____________________________________________________________________________________Xafiiska Wararka Qaranimo Online | Mogadishu, Somalia
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