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Somalia Says Debt Relief a ‘Game Changer’ as Leaders Welcome IMF, WB Declaration

Storyline:Business, National News

GOOBJOOG NEWS|MOGADISHU: Somali President Hassan Sheikh Mohamud has termed the ‘historic’ multibillion-dollar debt cancellation by the IMF and World Bank as a ‘game changer’ as leaders across the country welcomed the announcement Wednesday night.

“Today, Somalia’s debt relief is a big game changer for development in our country. However, it is just the beginning to achieve sustainable development and prosperity,” the President said.

The President said Somalia’s reform journey had ultimately paid off despite external challenges such as painful regular climatic shocks and the ongoing fight against international terrorism. “For Somalia to move forward in the positive economic direction we all needed, we had to reform our laws, systems, policies, and practices. Reaching the HIPC Completion Point is the fruit of these reforms. When my government committed to the reform program nearly a decade ago, this was the result we envisaged.”

He spoke in New York where he met with various international partners a day after he chaired an international security conference on Somalia.

Finance Minister Bihi Egeh said robust reforms in all sectors had delivered the much-awaited debt relief.

“Through our enabling reforms, we have consistently raised domestic revenue, strengthened public financial management, improved good governance and central banking operations, and enhanced the capacity of our national institutions. We will build on these successes going forward,” Egeh said.

In Mogadishu, Prime Minister Hamze Barre hosted a celebration dinner. The PM said it was a night of success for the Somali people since the debt burden that inhibited development had been lifted. He attributed the milestone as an outcome of many years of hard work by previous and current administrations.

Former President Mohamed Farmaajo who led Somalia to the Decision Point under the Heavily Indebted Poor Countries (HIPC) welcomed the announcement, noting the debt relief milestone was ‘a cross-government effort spread over three Somali administrations.’ He called for strong parliamentary oversight in future contracting, adding, “We must borrow for nationally agreed investment and not government operational costs.”

The Executive Boards of the IMF and World Bank said Wednesday that Somalia had made satisfactory progress in meeting the requirements to reach the HIPC Completion Point. Somalia has implemented a poverty reduction strategy for at least one year and maintained a track record of sound macroeconomic management, as evidenced by the satisfactory implementation of the Extended Credit Facility (ECF) supported program.