WASHINGTON – The U.S. Department of the Treasury today welcomed Somalia securing comprehensive debt relief from the international community under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Actions today at the Board of the International Monetary Fund and yesterday at the World Bank Board reflect Somalia’s strong performance under programs designed to achieve economic growth and poverty reduction.
In recognition of Somalia’s HIPC progress and to support Somalia as it continues rebuilding its economy, the United States intends to cancel 100 percent of its remaining claims, bringing the total amount of U.S. debt relief for Somalia under HIPC to around $1 billion. The U.S. urges Somalia’s other bilateral creditors to be equally generous and to move expeditiously.
“Achieving the HIPC Completion Point is a significant milestone in Somalia’s path to continued recovery and meaningful reform to promote greater stability and economic opportunities for the Somali people,” said U.S. Treasury Secretary Janet Yellen. “The collective efforts of Somalia’s bilateral and multilateral partners showcase our ability to advance economic security and improved governance around the world.”
Following full delivery of debt relief under the HIPC Initiative, the Multilateral Debt Relief Initiative, and beyond-HIPC assistance, Somalia’s external debt at end-2023 is projected to decline to under $700 million (6 percent of GDP) from around $5.3 billion (64 percent of GDP) at the end of 2018.
Many developing countries, including Somalia, face growing challenges, including climate change, pandemics, and fragility and conflict that threaten development gains and disproportionately impact the poorest and most vulnerable. For that reason, the U.S. Treasury has led a call for the international financial institutions to leverage their full set of tools to help member countries undertake reforms that increase the quality of their economic policy, enhance economic potential and inclusive growth, build long-term resilience to global shocks, and address underlying fragility.
The United States supports the efforts of the Somali people and the government of President Hassan Sheikh Mohamud to overcome years of conflict and instability and to implement reforms that are putting Somalia back on the path of economic growth and poverty reduction. The United States looks forward to Somalia’s continued progress and remains a steadfast partner in the country’s development.