Thursday April 10, 2025
Mogadishu (HOL) — Somalia has signed a $306.5 million debt relief agreement with the Arab Monetary Fund, marking a major step in its efforts to recover from decades of conflict and rejoin the global financial system.
The agreement, signed Wednesday in Kuwait, restructures Somalia’s debt with the Abu Dhabi-based fund, which supports financial stability and economic growth across Arab nations. Specific terms of the restructuring were not disclosed.
Finance Minister Bihi Iman Egeh, who led the Somali delegation to Kuwait, said the agreement was essential to advancing Somalia’s economic recovery and strengthening ties with regional financial institutions.
“This agreement is fundamental to re-engagement with the fund and reinforces Somalia’s reform agenda,” said Finance Minister Bihi Iman Egeh. He described the deal as a "critical milestone" in the country’s broader debt relief efforts. He added that the deal supports the government’s long-term goals for sustainable development and economic growth.
The Somali government is working to revitalize its economy after enduring decades of civil war, political instability, and repeated climate shocks—including droughts, floods, and locust infestations—that have displaced communities and devastated agriculture.
The agreement follows a series of financial breakthroughs. In December 2023, Somalia completed the final stage of the Heavily Indebted Poor Countries (HIPC) Initiative, clearing the path for broad debt forgiveness. Soon after, the Paris Club of creditor nations canceled 99% of Somalia’s bilateral debt, significantly reducing its financial burden.
The Somali National News Agency (SONNA) said the latest deal reflects growing international confidence in the country’s reform trajectory and economic governance.
The AMF, which includes 22 Arab member states, provides loans, technical support, and policy advice to help countries stabilize their economies and implement structural reforms.
Somalia is now seeking increased access to concessional financing and long-term investments, hoping to leverage its improved financial standing to fund infrastructure, services, and economic development.