U.S. Ambassador Donald  Y. Yamamoto and Somalia Minister of Finance Abdirahman Beileh met in Mogadishu Sept. 27, 2020, and signed a bilateral agreement to reduce and restructure debt totaling  US$1 billion owed by the Federal Government of Somalia (FGS) to three U.S. government agencies.  Ambassador Yamamoto also congratulated Mohamed Hussein Roble on his confirmation as Somalia’s prime minister. (credit: U.S. Mission to Somalia)

By Gary Raynaldo    DIPLOMATIC TIMES

The United States signed a bilateral agreement this week with the Federal Government of Somalia waiving $US1 Billion debt the impoverished Horn-of-Africa nation owed it.  U.S. Ambassador Donald Y. Yamamoto and Somalia Minister of Finance Abdirahman Beileh met at the American Embassy  in Mogadishu Sunday and signed a bilateral agreement to reduce and restructure debt owed by Somalia  to three U.S. government agencies.  The newly-appointed prime minister of the FGS, Mohamed Hussein Rooble, was present at the event. The United States was Somalia’s largest creditor. According to the U.S.,  signing this agreement was possible because “Somalia has implemented significant economic reforms”  in recent years and in March 2020 reached the first stage of debt relief, known as “Decision Point,” through the Heavily Indebted Poor Countries Initiative.  When Somalia reaches the final stage, “Completion Point,” the US will have forgiven more than $1 billion in debt. 

“We commend the FGS on its progress in pursuit of economic reform.  Working through the debt relief process will allow Somalia to regain access to financial support from international financial institutions so that it can invest in poverty reduction and economic growth.  The United States remains a committed partner to Somalia and is pleased to play a role in ensuring the economic success of the people of Somalia. “

-U.S. Mission to Somalia

Dr Beileh in a tweet, later, spoke with pride about how successful Somalia was of late in convincing creditors to strike out debts owed.

“It was an honour to sign the relief agreement between Somalia & USA today following the successful Paris Club discussions in March 2020.   The USA is a strong supporter of our economic reforms. We are committed to going forward.”

Somalia Minister of Finance Abdirahman Beileh

U.S. Ambassador Donald  Y. Yamamoto and Somali Minister of Finance Abdirahman Beileh met in Mogadishu Sept. 27, 2020, and signed a bilateral agreement to reduce and restructure debt owed by the Federal Government of Somalia (FGS) to three U.S. government agencies. (credit: U.S. Mission to Somalia)

U.S. Ambassador Donald  Y. Yamamoto and Somali Minister of Finance Abdirahman Beileh met in Mogadishu Sept. 27, 2020, and signed a bilateral agreement to reduce and restructure debt owed by the Federal Government of Somalia (FGS) to three U.S. government agencies. (credit: U.S. Mission to Somalia)

U.S. Ambassador Donald  Y. Yamamoto and Somali Minister of Finance Abdirahman Beileh (far right) with new Prime Minister Mohamed Hussein Roble

IMF Reaches Staff-Level Agreement for First Review of  Extended Credit Facility for SOMALIA

The International Monetary Fund (IMF) is an international organization, headquartered in Washington, D.C., consisting of 189 countries

The Somali authorities and the International Monetary Fund (IMF)  mission team reached a staff-level agreement this week on the completion of the first review under the Extended Credit Facility.  In March, the IMF said its Executive Board approved a new three-year $395 million financing arrangement for Somalia under its Extended Credit Facility (ECF) and Extended Fund Facility (EFF).  A staff team from the IMF,  led by Allison Holland, held discussions with the Somali authorities during a virtual mission from September 12—22, 2020 on the first review of Somalia’s economic reform program being supported by an  ECF arrangement.  The IMF and the World Bank announced in March that Somalia had taken the necessary steps to begin receiving debt relief, a crucial move that will allow the Horn of Africa country to lower its $5.2 billion in external debt to around $557 million.  Somalia is grappling with the coronavirus outbreak, a recent desert locust swarm and is gearing up for elections later this year.   Holland said in a statement on September 24 that during the the first half of 2020, Somalia has been hit by multiple shocks—flooding, desert locusts, and the global coronavirus pandemic.  Allison said these have aggravated the humanitarian challenges, and negatively impacted the economy and the government’s ability to mobilize domestic revenues.