Johannesburg - The International Monetary Fund (IMF) and World Bank have said that Somalia is eligible for debt relief under the Enhanced Heavily Indebted Poor Countries (HIPC) initiative.
The decision was described as an "important step" to seeing Somalia's US$5.3 billion (as of 2018) debt being forgiven.
The boards of the global organisations on Thursday commended the country's "sustained commitment to economic and institutional reforms under challenging circumstances" and agreed that Somalia was eligible for HIPC assistance based on a preliminary assessment.
IMF managing director and acting chair, Kristalina Georgieva said: "Today’s agreement by the IMF Executive Board that Somalia can be eligible for debt relief under the Enhanced HIPC Initiative marks a historic moment. It provides a clear recognition of Somalia’s sustained commitment to key economic and financial reforms under consecutive staff-monitored programmes with the IMF.
"Helping Somalia achieve debt relief and unlock access to the needed resources to increase growth and reduce poverty is a key priority for the IMF. I am very grateful to our members for all their support in this endeavour."