Russia cancels $684m Somali debt as Putin hosts African leaders

GOOBJOOG NEWS | RUSSIA: Russia has waived $684 million in debt by the Somali government in a major step to end Somalia’s debt burden.

Finance Bihi Iman Egeh and Russia’s Deputy Minister of Finance, Timur Igorevich Maksimov signed a deal on Wednesday in St. Petersburg that would cancel the debt.

Deputy Prime Minister Salah Ahmed Jama witnessed the signing of the agreement which will go a long way in easing Somalia’s debt burden.

Russia now joins Norway which announced debt forgiveness of $1.8 million in January 2020. The African Development Bank also cleared $122.55 million in arrears following a contribution by the United Kingdom and the European Union in March 2020.

The Paris Club creditors agreed in April 2020 to immediately cancel $1.4 billion owed by Somalia. This amounted to 67% of the debts owed to Paris Club creditors by Somalia.

The US further said in September 2020 that it will cancel $1 billion in debt by the end of 2024 when Somalia is expected to reach the Completion Point under the Heavily Indebted Poor Countries (HIPC) initiative.

The Russian deal comes as the Russia-Africa Summit opens in St. Peterburg.