Somalia is on the brink of a groundbreaking financial transformation as it anticipates substantial debt relief this week. This historic move, facilitated through the World Bank and International Monetary Fund's Heavily Indebted Poor Countries (HIPC) Initiative, is set to slash Somalia's debt-to-GDP ratio to less than 6%, marking a pivotal moment in its reintegration into the global financial system after nearly three decades.
The war-weary East African nation is poised to attain the coveted "Completion Point" under HIPC on December 13, a milestone heralded as a significant step in Somalia's development journey, according to an IMF media advisory released on Monday.
The World Bank's executive board is slated to greenlight the Completion Point on Tuesday, with the IMF's board following suit on Wednesday.
Upon securing these approvals, Somalia is poised to receive substantial debt relief, paving the way for a remarkable reduction in its external debt from approximately 64% of GDP in late 2018 to less than 6% by the close of 2023, as outlined in the advisory.
This momentous financial turnaround comes on the heels of the United Nations Security Council's recent decision to lift a three-decade-long arms embargo on Somalia earlier this month. The embargo, initially implemented to stem the flow of weapons to warring factions during a protracted civil war, sets the stage for Somalia's renewed global engagement and economic revitalization.