President Hassan Sheikh: Somalia on the verge of financial liberation

NEW YORK, USA - President Hassan Sheikh Mohamud believes Somalia is on the right path in terms of economic revival, stressing the much-anticipated debt relief as a curtain raiser to tremendous strides in development and regional cooperation within the Horn of Africa.

In New York on Tuesday, Hassan Sheikh said the country is about to witness economic liberation, adding that the debt relief will open doors for major investments besides giving room for the government to divert resources towards infrastructural development.

The government, he adds, will work hard to maintain fiscal discipline over years to resuscitate the country from economic depression and recession, which have been defining the country's economy over the years. Somalia is one of the poorest countries in the world.

“The announcement of debt relief tomorrow marks another significant stride. This financial liberation is expected to catalyze economic growth, attract investment and enable the government to allocate resources towards public sector infrastructure development," he said.

On Wednesday, Somalia is expected to get major debt relief this week, slashing its debt-to-GDP ratio to less than 6% in a historic move that would allow it to rejoin the international financial system after roughly 30 years, Reuters reports.

An IMF media advisory on Monday said Somalia was scheduled to reach the "Completion Point" under HIPC on Dec. 13, calling it "a major milestone in its development path".

The World Bank's executive board is expected to approve the Completion Point on Tuesday and the IMF's board on Wednesday. After those approvals "Somalia will receive significant debt relief that will reduce its external debt from about 64 per cent of GDP at end-2018 to less than 6 per cent of GDP at end-2023," the advisory said.

In July, Somalia said Russia had granted it relief on $684 million of debt, saying it would play a big role in its debt forgiveness process. Some reforms had been initiated by the country's finance department, triggering impending debt relief.

Besides the economic gains, Hassan Sheikh stressed humanitarian aid in the country, while acknowledging the devastating impacts of the floods. "Floods have caused greater displacement than droughts, making it nearly impossible to access some of the areas affected by the floods."

GAROWE ONLINE