EIB Weighs €70M Loan to Somalia Despite Debt Limits and Political Crisis

MOGADISHU, Somalia (GO) — The European Investment Bank is weighing a loan of up to €70 million to Somalia’s Development and Reconstruction Bank, the first such financing since 1980.

The move comes less than two years after Somalia secured $4.5 billion in debt relief under the Heavily Indebted Poor Countries Initiative, which restricts the nation from taking on new external loans until 2028. The timing of the potential agreement has raised questions among international observers.

President Hassan Sheikh Mohamoud recently appointed Hodan Osman, a close family ally, as governor of the SDRB, and his son-in-law, Adam Roble, as director general. Critics say the arrangement places direct control of the loan under individuals tied to the presidency.

The consideration of the loan comes at a sensitive time. The government led by Hassan Sheikh has less than one year remaining in its constitutional mandate. The president is also seeking to implement a controversial election model that has been rejected by the opposition and some federal member states.

A high-level EIB delegation is expected to visit Mogadishu in the coming days to conduct due diligence. While the financing could bolster infrastructure and development, concerns over transparency, governance, and Somalia’s fragile political and security landscape loom large.

Analysts warn the loan could undermine international donor efforts and risk fueling unrest.

“Why would such financing be approved for a government with fewer than nine months left in its mandate? This is a risky move that could undo decades of investment and progress,” one observer said.

GAROWE ONLINE