Somalia, Japan sign ¥14 billion debt relief agreement

The Minister of Finance of the Federal Government of Somalia, H.E Bihi Iman Egeh signed a debt relief agreement worth ¥14 billion which is almost a hundred million dollars together with the Japanese representative, Mr. Ogihara Hiroshi, the Deputy Head of Mission of the Japan Embassy in Kenya.

“This follows the successful debt relief process and the Paris Club agreement of March this year, which supported debt cancellation for Somalia. I thank the Japanese government and people for their unwavering support of our economic reforms and growth,” Minister Bihi said.

Minister Egeh thanked the people and the government of Japan for relieving the debts they owed to Somalia and said that this move will help Somalia to step up and restructure its financial system and increase the national income so that we can reach financial freedom.

According to the IMF, “Somalia’s total public debt is projected to increase in nominal terms to US$778 million at end-2024 from US$766 million at end-2023, but decline relative to GDP from 6.6 percent of GDP at end-2023 to 6.1 percent of GDP at end-2024.

“The majority of total public debt is external. Somalia is assessed to be at moderate risk of debt distress, both for external and overall public debt. The present value (PV) of public and publicly guaranteed (PPG) external debt is estimated to be 4.7 percent of GDP in 2024 – below the 30 percent threshold for countries like Somalia with weak debt carrying capacity.”