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The Executive Boards of the IMF and the World Bank’s International Development Association (IDA) have approved the Heavily Indebted Poor Countries (HIPC) Initiative Completion Point for Somalia, which provides total debt service savings for the country of US$4.5 billion. Following HIPC Completion Point, Somalia’s external debt has fallen from 64 percent of GDP in 2018 to less than 6 percent of GDP by end 2023. This debt relief will facilitate access to critical additional financial resources that will help Somalia strengthen its economy, reduce poverty, and promote job creation.
This IMF clip looks at how the IMF and World Bank have approved HIPC status for Somalia, eradicating 90% of the economy's external debt, or $4.5bn, allowing for greater government spending on more productive areas of the economy such as healthcare and education. The hope is that this will strengthen social safety nets, boosting the prospects for sustainable growth in this war-torn economy.