The government of Bangladesh has announced that it will assist Somalia repay part its international debt following a call by International Monetary Fund (IMF).
Somalia is struggling to convince the international community to accept its debt relief bid.
According to a letter sent by the finance ministry to the Washington-based IMF, Bangladesh pledged to support Somalia with $817,571.50 to settle its debt.
The development came after IMF Managing Director Kristalina Georgieva wrote to Finance Minister AHM Mustafa Kamal, the IMF governor of Bangladesh, in December last year seeking Special Drawing Right (SDR) 0.70 million, or Tk 8.21 crore.
SDR refers to an international type of monetary reserve currency created by the IMF in 1969 as a supplement to the existing money reserves of member countries.
The IMF uses SDRs for internal accounting purposes. SDRs are allocated by the IMF to its member countries and are backed by the full faith and credit of the member countries’ governments.
Bangladesh’s share with the IMF amounts to SDR 1,066.60 million.
Somalia has not made a service or amortization payment since civil war broke out more than 25 years ago.
Somalia’s external debt amounts to approximately USD 4.7 billion, and debt cancellation is a key priority for the Somali Government.
A third of the debt is owed to the multilateral development banks, the World Bank and t I’mhe African Development Bank, and the International Monetary Fund (IMF).
The Somali government has been working to establish legal and technical capacities for revenue generation since 2017.