Somalia’s External Debt Relief: Pursuing Economic Reforms Beyond HIPC Initiative
After more than two decades of isolation from the global financial system, Somalia started to re-engage with international financial institutions (the International Monetary Fund (IMF) and the World Bank) in 2013 to seek technical and financial assistance to revive the economy. This re-engagement was the building block for Somalia joining the Heavily Indebted Poor Countries (HIPC) initiative in 2016 to receive debt relief and access grants and concessional loans. HIPC was created in 1996 by the IMF, the World
Bank and other multilateral, bilateral and commercial creditors to ensure that the poorest countries in the world are not overwhelmed by unmanageable or unsustainable debt burdens.
This report takes stock of Somalia’s external debt relief progress and challenges, and also draws on lessons from other HIPC countries on how to navigate towards the HIPC completion point and beyond in order to consolidate the gains of the economic reform program.