The Paris Club of creditor nations have approved to cancel USD 1.4 billion debt owed by the Federal Republic of Somalia on Tuesday.
In a press statement, the club congratulated the horn of the African nation for the milestone achievement that is expected to boost its quest for economic reforms hence development.
“The representatives of the Paris Club creditor countries agreed on 31 March 2020 with the Government of the Federal Republic of Somalia to restructure its external public debt. The Paris Club congratulates Somalia for having reached its Decision Point under the enhanced initiative for the Heavily Indebted Poor Countries (enhanced HIPC Initiative) in March 2020.”
This agreement was concluded under Cologne terms by the Paris Club to provide interim debt relief as part of the HIPC Initiative. The terms will lead to the immediate non-ODA debt cancellation of US$ 1.4 billion in debt owed by Somalia to Paris Club creditors.
Paris Club members also expressed their commitment to implement the final component of debt relief contemplated under the enhanced HIPC Initiative as soon as Somalia meets the conditions to reach the Completion.
Representatives from non-Paris club members which attended the meeting including Kuwait Fund for Development, Saudi Fund for Development and the Abu Dhabi Fund for Development expressed their support to the terms of the agreement between the Paris Club and the Government of Somalia and indicated their willingness to provide comparable terms under the framework of Enhanced HIPC Initiative and in accordance with terms and conditions adopted by their respective Boards of Directors.
Somalia is expected to reach its HIPC Completion Point by 31st March 2023 or earlier and receive the remainder of the debt reduction envisioned under the enhanced HIPC Initiative already endorsed by the international community in 1999.
Somalia delegation was headed by Dr. Abdirahman D. BEILEH, Minister of Finance. The meeting was chaired by Mr. Guillaume CHABERT, Co-Chair of the Paris Club, Assistant Secretary at the Directorate-General of the Treasury of the French Ministry of Economy and Finance.