MOGADISHU (Reuters) – Somalia has signed a $306.5 million debt relief deal with the Arab Monetary Fund (AMF), in what the government in Mogadishu called a critical milestone in its economic reform programme.
The Horn of Africa country’s government is trying to revive its economy after it was battered by decades of civil war. It has also suffered from severe droughts, floods, and a locust infestation in recent years.
Last year, it secured the cancellation of 99% of the debt Somalia owed to members of the Paris Club of creditor nations, a vital step in the war-scarred country’s efforts to rejoin the international financial system.
The deal with Abu Dhabi-based AMF, which fosters financial stability and economic development in Arab member states, involves the restructuring of the debt owed by Somalia to the fund, the AMF said in a statement, without providing more details.
Somalia’s Finance Minister Bihi Egeh said the agreement was crucial to the country’s debt relief efforts and “fundamental to re-engagement with the fund.”
The signing, which took place in Kuwait on Wednesday, reflected “growing international confidence in Somalia’s economic trajectory and reform efforts,” Somalia’s state news agency SONNA reported.
(Reporting by Hereward Holland; Editing by Duncan Miriri and Jamie Freed)
