IMF pledges support for Somalia's debt relief

By Trend

The International Monetary Fund (IMF) has expressed support for Somalia's efforts to secure debt relief through the lender's highly indebted poor countries program, reports Trend referring to Xinhuanet.com.

Kristalina Georgieva, IMF managing director who held talks with Somali Prime Minister Hassan Ali Khaire pledged to work with the membership of the Fund to secure the financial resources necessary to clear arrears to the IMF and cover the costs of debt relief.

"Maintaining strong performance, together with support from international partners, will pave the way for Somalia to receive debt relief in the near future," Georgieva said in a statement issued after the talks on Saturday evening.

According to the IMF, Somalia's external debt is about 5 billion U.S. dollars, but Mogadishu has not made a service or amortization payment since the onset of the civil war two decades ago, making it impossible to access loans from the IMF.

Georgieva said she had a good and constructive meeting with Khaire and congratulated the PM for the continued strong implementation of Somalia's economic reform program amid challenging circumstances.

"We exchanged views on the importance of securing debt relief under the Highly-Indebted Poor Country (HIPC) initiative as soon as possible," she said.

During the meeting, Khaire reiterated the government's strong commitment to reforms under the current Staff Monitored Program (SMP) and stressed its completion of the ninth National Development plan, both of which aim to meet requirements of the HIPC initiative.

"I assured the Prime Minister of the IMF's full support for Somalia's efforts to secure debt relief, including working with the membership of the Fund to secure the financial resources necessary to clear arrears to the IMF and cover the costs of debt relief," said Georgieva.

To qualify for the debt cancellation, Somalia needs to convince the IMF, which would possibly convene its board of directors to review the country's progress.

Should the IMF board give approval for the debt cancellation, Somalia would be required to hold bilateral talks with private donors on the terms of debt forgiveness.