The International Monetary Fund (IMF) has approved a financing package for Somalia
In a statement, Kristalina Georgieva (pictured), Managing Director of IMF said: “Today, the IMF Executive Board approved a financing plan that will help mobilize the resources needed for the IMF to cover its share of debt relief to Somalia. This financing plan relies on a broad global effort, based on member contributions of cash grants and amounts derived from IMF internal resources.
“This marks a critical step in helping Somalia advance the process of normalizing relations with the international community and make progress towards achieving debt relief under the Heavily-Indebted Poor Country (HIPC) initiative.”
She added: “Debt relief for Somalia is a priority for the IMF. I am encouraged by the support from our members on this issue and their recognition of the progress Somalia has made on economic reforms under successive IMF Staff-Monitored Programs (SMP). The HIPC Decision Point, at which time debt relief will begin to be delivered, could be reached as soon as our members have provided the necessary financial commitments, assuming the authorities continue their strong reform efforts. This would help unlock significant new financial resources to address Somalia’s large development needs and poverty reduction.”
Based on both external and public debt indicators, Somalia is in debt distress. Total public debt is very high, at dollar 4.8 billion, or 101 percent of GDP at end-2018—nearly all of which is external (100 percent of GDP).
