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In a historic development, the US has agreed to forgive $1.14 billion of Somalia’s debt as part of a bilateral agreement signed in Mogadishu. The Somali Minister of Finance, Bihi Egeh, and the US Ambassador to Somalia, Richard Riley, finalized the arrangement during a formal signing ceremony on November 6, 2024.
Debt Relief Signals Progress in Economic Reform
The agreement is a critical step for Somalia, which has worked over recent years to secure debt forgiveness from other major nations, including France and Russia. The US’s decision to cancel a substantial portion of Somalia’s debt is part of a broader effort to support the country’s commitment to an economic reform program driven by the International Monetary Fund (IMF). These reforms focus on increasing domestic revenue, improving public financial management, and bolstering governance.
Acknowledging US Support for Somalia’s Future
Minister Egeh expressed deep gratitude to the US government, emphasizing that the debt relief would aid Somalia’s economic stability. He thanked “the United States and the American people for their continued support in the field of economic development and reforming the financial system in the country.” Egeh affirmed Somalia’s determination to maintain its reform agenda, which aims to build a more resilient economic foundation.
US Praises Somalia’s Commitment to Reform
US Ambassador Riley praised Somalia’s dedication to its IMF-led reforms, suggesting that a more economically stable Somalia is beneficial for both nations. “This debt relief reflects the US’s belief that a safer, more prosperous Somalia will benefit both nations,” Riley remarked during the ceremony.
This agreement underscores Somalia’s increasing efforts to reduce its debt burden while reinforcing its commitment to sustainable economic development. With support from international allies, Somalia’s focus on reform is set to play a key role in its path to stability and growth.