The United States has agreed to cancel $1.14 billion in debt owed by Somalia, marking a significant milestone in the troubled nation’s economic recovery. The deal was finalized in a signing ceremony attended by Somalia’s Finance Minister, Bihi Egeh, and US Ambassador to Mogadishu, Richard Riley, who hailed the agreement as a testament to Somalia’s progress in financial reform.
This relief forms the largest portion of Somalia’s $4.5 billion debt, forgiven through an International Monetary Fund and World Bank initiative, known as the Heavily Indebted Poor Countries Initiative. Ambassador Riley highlighted Somalia’s commitment to economic transparency and sustainable practices as key to securing this assistance.
In a post, Egeh thanked the US for its steadfast support, which includes over $1.2 billion in humanitarian, economic, and security aid this year. Somalia, where 70% of the population lives on less than $1.90 a day, aims to reach a growth rate of 3.9% by 2025.
Despite progress, Somalia remains vulnerable to global challenges, such as disruptions in grain supply due to the Ukraine conflict and ongoing regional instability, which could impact its projected economic growth.