US grants Somalia more than $1B in debt relief

​​​​​​​MOGADISHU, Somalia

The Somali government announced Tuesday that it has reached a debt forgiveness agreement totaling more than $1.14 billion with the US.

The agreement was signed in Mogadishu between Finance Minister Bihi Egeh and US Ambassador Richard Riley.

“The American government debt totaling over $1.14 billion dollars was forgiven today by the United States government,” Egeh said in a statement on X.

He said the agreement follows the successful debt relief process and the Paris Club agreement in March that supported debt cancellation for Somalia.

“I thank the U.S. government and people for their unwavering support of our economic reforms and growth,” he said.

Riley said $1.1 billion is in addition to the $1.2 billion of development, economic, security, and humanitarian assistance the United States has provided to Somalia during the current fiscal year.

“The United States continues to be a steadfast partner in support of the people of Somalia,” he said separately.

Somalia is part of about 60% of the world’s poorest countries which are at high risk of or already in debt distress, with a public debt averaging 70% of their GDP, an increase of more than 60% from a decade ago, according to the World Bank.

In December 2023, Somalia secured $4.5B in debt relief from creditors.

The Horn of Africa nation was the 37th country to reach the Completion Point under the Heavily Indebted Poor Countries (HIPC) Initiative – a program launched by the World Bank and the IMF to help countries reduce their debt and get to more sustainable levels.

More than 30 countries have benefited from HIPC since its inception in 1996, with Somalia one of the last remaining in the program.