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UK cancels 100 per cent of Somalia's debt, boosting economic recovery

Somalia's Finance Minister, Bihi Egeh. (X/Bihi Egeh)

By Amina Wako | Tuesday, April 9, 2024

The Paris Club expressed its satisfaction with Somalia's determination to implement a comprehensive poverty reduction strategy and an ambitious economic reform programme.

The United Kingdom has announced the cancellation of 100 per cent of Somalia's debt, providing a major boost to the country's fragile economic recovery from an ongoing three-decade conflict.

"Today I confirm to Finance Minister Bihi that the UK has cancelled 100% of Somalia's historic debts. As Somalia's debt relief champion, we are committed to helping attract investment and grow the Somali economy," said Sam Thomas, UK deputy ambassador to Somalia.

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We’ve cancelled 100% of Somalia’s historic debt through completion of the HIPC Initiative to help:

✔️ Attract investment
✔️ Grow the economy
✔️ Build a secure and stable Somalia #GoFarGoTogether pic.twitter.com/ggbEsFskgi
— UK in Somalia🇬🇧🇸🇴 (@UKinSomalia) April 9, 2024

Somalia's Finance Minister, Bihi Egeh, welcomed the news on social media, stating, "This is a fantastic achievement that follows on from the Paris Club negotiations last month. We are grateful to the UK Foreign, Commonwealth, and Development Offices and all creditors for their support in addressing Somalia's unsustainable debt burden. We look forward to a prosperous post-HIPC future."

The announcement comes after the Paris Club, which includes the UK, cancelled 99 per cent of Somalia's debt last month. The move is expected to reduce Somalia's external debt, which stood at $5.3 billion, to less than 6% of its gross domestic product by the end of 2023.

The Paris Club expressed its satisfaction with Somalia's determination to implement a comprehensive poverty reduction strategy and an ambitious economic reform programme, laying the foundations for sustainable and inclusive economic growth.

"This move positions Somalia on a path towards financial stability and economic revitalization," said a spokesperson for the UK Foreign, Commonwealth, and Development Office.

The cancellation of Somalia's debt is expected to attract investment and promote economic growth in the country, which has been ravaged by conflict for over three decades. People view this move as a significant step towards rebuilding the country's economy and improving the lives of its citizens.

"We are committed to supporting Somalia in its efforts to rebuild and recover," said Thomas. "This debt cancellation is a key step towards achieving that goal."