IMF grants Somalia $970,000 interim assistance under HIPC initiative
MOGADISHU, Somalia - Following a request by the Federal Government of Somalia, the Executive Board of the International Monetary Fund [IMF] has granted additional interim assistance to the country under the enhanced Heavily Indebted Poor Countries [HIPC] Initiative.
According to the statement issued by the global lender, Somalia received $0.97 million on a lapse of time basis. This comes amid efforts by the country to clear debt, some of which dates back to the 70s and 80s during the regime of Siad Barre.
The interim assistance, IMF noted, will cover Somalia's debt obligations to fund for the period starting March 25, 2021, to March 24, 2022. This is a span of one year and is regarded as one of the best practices in the world of borrowing.
On March 25, 2020, the Executive Board approved that Somalia had reached the HIPC Decision Point. At the same time, the Board approved three-year arrangements under the Extended Credit Facility [ECF] and Extended Fund Facility [EFF].
The Board also approved interim assistance in the amount of SDR 1.11 million [about US$ 1.5 million] for the period March 25, 2020–March 24, 2021. The first ECF review was completed on November 18, 2020.
Performance under the ECF-supported program has been satisfactory and Somalia continues to make progress on debt rescheduling and other reforms needed to reach the HIPC Completion Point. The request was made by Somalia's Finance Minister Abdirahman Duale.
Interim assistance under the enhanced HIPC Initiative is debt relief granted on a country’s debt service falling due between the HIPC Decision and Completion Points. Once a country reaches the HIPC Completion Point, it will receive the full debt relief committed at the HIPC Decision Point.