The African Development Bank (AfDB) and the African Development Fund on Wednesday approved a framework for 122.55 million U.S. dollars to clear Somalia’s arrears.
The move paves the way for the Bank Group to fully reengage with Somalia and opening opportunities for enhanced financing for the country, it said in a statement.
Abdirahman Beileh, the Somali finance minister, said AfDB has accompanied Somalia through the difficult reforms, which can only make Mogadishu a better place for all Somalis.
“We are committed to continuing our reforms as we have seen their benefits to our governance systems and capacity to manage our economy, and, more importantly, to improving government accountability to the people,” Beileh said.
The framework for Somalia’s Arrears Clearance and a Policy-based Operation is premised on Somalia having secured donor support to clear all arrears to the AfDB.
This, the lender said, will result in the lifting of sanctions on the country, opening up new financial opportunities.
“The Bank plans to immediately resume normal cooperation with the Federal Government of Somalia as soon as it clears its arrears to the Bank Group,” it said.
It said additional financial resources will be provided to support ongoing and new reforms necessary for Somalia to reach Completion Point under the Enhanced Heavily Indebted Poor Countries Initiative.
“The sacrifices of the Somali people under the leadership of the Federal Government of Somalia during the implementation of difficult and wide-ranging reforms has been recognized by the wider international community,” AfDB President Akinwumi Adesina said.
The statement came after the International Monetary Fund (IMF) and the World Bank said on Feb. 13 that Somalia is now eligible to receive debt forgiveness under a special program aimed at helping poor countries.
The two lenders’ assessment is an important step towards forgiveness of most of Somalia’s debt, which measured about 5.3 billion U.S. dollars at the end of 2018. Enditem