Somalia Receives Debt Relief Without Common Macroeconomic Governance

[Deeq A.]

The Somali Government received the good news of achieving the Heavily Indebted Poor Countries (HIPC) Completion Point (CP) before the deadline of December 31, 2023, which is a historical milestone for important reasons. First, the HIPC-CP determines the eligibility for full and irrevocable cancellation of about 90% of the $5.6 billion of Somalia’s external debt, committed at the decision point (DP). Second, it confirms the commitment of Somalia to repay the remaining debt, estimated to be about 10% of the total debt, amounting $557 million, and any future debt. Technically, this implies that Somalia’s debt burden is reduced to a sustainable level in relation to its gross domestic product (GDP) and export earnings (EE), although reality casts doubt.

Source: Hiiraan Online