Somalia reaches heavily indebted poor countries completion point

Somalia has reached a significant milestone in its economic journey as it recently reached the completion point under the heavily indebted poor countries initiative. In a recent interview with Laura Jaramillo, Advisor and Mission Chief of the Middle East and Central Asia Department at the International Monetary Fund (IMF), she highlighted the importance of this achievement for Somalia. This milestone means that Somalia has received debt relief amounting to $4.5 billion. The country's external debt, which was previously 64% of GDP in 2018, has now been reduced to less than 6% thanks to this debt relief. This accomplishment showcases Somalia's strong commitment to implementing reforms over the past decade. The IMF has been engaging with Somalia since 2012, and through a series of reforms, the country has successfully reached this completion point on December 13th. One of the key factors contributing to Somalia's success is the unwavering commitment from all levels of the country to pursue economic reform and build institutions from the ground up. Despite emerging from years of conflict, Somalia has made significant progress in establishing economic institutions, rebuilding the budget process, increasing revenues, and developing a more policy-oriented central bank. For example, revenue as a share of GDP has almost doubled from 1.2% to 2.7% in the past decade, while expenditures per person have increased from $8 to $48 over the same period. Looking ahead, Somalia is poised to attract foreign investors and spur economic growth following this achievement. The country has demonstrated its ability to build institutions, create legal frameworks, and enhance capacity, making it an attractive destination for investments that can fuel growth and employment. The IMF's ongoing support through a new three-year program will focus on areas like revenue generation, public financial management, financial development and inclusion, governance and accountability, as well as statistics. By continuing to build on past achievements and maintaining reform momentum, Somalia is on track for a positive economic outlook in the coming years. Laura Jaramillo reiterated the IMF's commitment to supporting Somalia's reform agenda and expressed optimism about the country's future prospects. The collective efforts of Somalia and its partners like the IMF have set a precedent for other countries facing economic challenges, offering hope and inspiration for a brighter future. This achievement not only signifies financial relief for Somalia but also represents a testament to resilience, dedication, and effective governance in the face of adversity.