US agrees to write off more than $1 billion of Somalia debt
WASHINGTON
The United States and Somalia have reached an agreement for Washington to cancel more than $1 billion debt owed by the troubled Horn of Africa nation.
The announcement came a day after the parliament in Somalia, which is heavily dependent on international aid, approved a $1.36 billion national budget for 2025.
Somalia is one of the poorest countries on the planet, enduring decades of civil war, a bloody insurgency by the Al-Qaeda linked jihadist group Al-Shabaab, and frequent climate disasters.
The U.S. ambassador to Mogadishu, Richard Riley, said at a signing ceremony that the bilateral agreement forgives Somalia's $1.14 billion debt to the United States.
Around 70 percent of the population lives on less than $1.90 a day, according to World Bank figures.
The finance ministry has forecast economic growth at 3.7 percent for this year and 3.9 percent for 2025, compared with 2.8 percent last year.
In March, Mogadishu secured an agreement with international creditors to cancel more than $2 billion in debt, the Paris Club of creditor nations said.
That followed the December IMF-World Bank deal sealed when Somalia reached the "completion point" of a debt management scheme known as the Heavily Indebted Poor Countries Initiative (HIPC).
Somalia's external debt has fallen from 64 percent of gross domestic product in 2018 to less than six percent of GDP by the end of 2023.
