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Mogadishu Breathes Sigh of Debt Relief

Somalia is set to receive debt relief of $4.5 billion from the International Monetary Fund and World Bank as part of a debt forgiveness initiative overseen by both organizations. The east African country is one of the poorest in the world, struggling to recover from decades of civil war, and with around 70 percent of its population living on less than $1.90 a day. “This debt relief will facilitate access to critical additional financial resources that will help Somalia strengthen its economy, reduce poverty, and promote job creation,” the IMF said. The green light comes as Somalia reached the “completion point” of the Heavily Indebted Poor Countries Initiative (HIPC), the fund added in a statement. Somalia’s external debt has fallen from 64 percent of gross domestic product in 2018 to less than six percent of GDP by the end of 2023. Debt service relief has been provided by the IMF, International Development Association, African Development Fund and other multilateral, bilateral and commercial creditors.