Somalia Prime Minister, Hamza Barre, on Wednesday, disclosed that the country has been granted a debt relief of $4.5 billion by the International Monetary Fund and the World Bank.

Barre noted that the relief is “equivalent to relieving every Somali person of a debt of more than $300,” adding that it’s a “testament that our country and our people are financially viable, attracting foreign investment, and we are no longer debt-ridden.”

The PM said the relief is monumental as it will allow Somalia to invest in development programs, revitalise the economy and borrow money from international lending institutions.

Reports had it that the Somalia government held celebrations in the capital, Mogadishu after the debt relief announcement.

The IMF and the World Bank, in a joint statement on Wednesday, titled, ‘IMF and World Bank Announce US$4.5 billion in Debt Relief for Somalia,’ revealed that their executive boards “have approved the Heavily Indebted Poor Countries (HIPC) Initiative Completion Point for Somalia, which provides total debt service savings for the country of US$4.5 billion.”

The statement noted that “Somalia’s external debt has fallen from 64 per cent of GDP in 2018 to less than 6 per cent of GDP by end 2023.”

Recall that in 1996, the IMF and the World Bank launched the Heavily Indebted Poor Countries Initiative to ensure that no poor country faces an unmanageable debt burden.

In 2005, to accelerate progress towards the United Nations’ Sustainable Development Goals, the HIPC Initiative was supplemented by the Multilateral Debt Relief Initiative.

This allows countries completing the HIPC Initiative process to receive 100 per cent relief on eligible debts by the IMF, the World Bank, and the African Development Fund.