- The Paris Club consortium of lenders, which counts Russia, the United States, and several other prominent global powers among its members, has officially agreed to waive $2 billion in debt owed by Somalia, as announced on Wednesday.
- Following the completion of a debt relief program overseen by the International Monetary Fund and World Bank, the group will forgive 99% of the funds owed by the African nation.
- In addition to Russia and the US, the Paris Club includes Belgium, Denmark, France, Germany, Italy, the Netherlands, Japan, the United Kingdom, Norway, and Spain.
- Somali Finance Minister Bihi Egeh expressed that the full cancellation of debt will significantly impact Somalia’s future, enabling the government to allocate resources towards essential public services.
- Somalia has committed to combat poverty by investing in healthcare, education, and fundamental infrastructure.
- Information Minister Daud Aweis described the debt forgiveness agreement as a significant step in Somalia’s path to financial recovery.
- Somalia became eligible for debt relief under the Heavily Indebted Poor Countries Initiative (HIPC) in December, potentially receiving up to $4.5 billion in support.
- The majority of Somalia’s debt was accumulated during the military regime of Siad Barre, which ended in 1991, with interest accruing on loans issued during that era.
- The country faced internal conflict in 2009, leading to clashes between government forces, supported by African Union peacekeepers, and al-Qaeda-affiliated al-Shabaab insurgents.
- In 2022, Somali government troops, backed by US airstrikes and African Union soldiers, launched significant offensives against al-Shabaab, reclaiming territories previously held by the group, although the conflict persists.
- The World Health Organization (WHO) has highlighted the impact of conflict and instability in Somalia.
