Russia writes off Somalia's $684 million debt

MOGADISHU - Somalia's efforts to stabilize the local economy were buoyed on Wednesday following Russia's decision to write off $684 million debt, in a move that comes before the European powerhouse holds a conference with African countries that will focus on trade and security.

The country has been struggling to pay debts to several countries and other international lenders, reverting to debt relief arrangements as a long-term strategy to put the country on the right trajectory in terms of economic revival and subsequent growth. The country has struggled for three decades due to instability.

Egeh Bihi, the country's minister for Finance and Economic Planning, hailed the move as "important for the economic growth" of Somalia while insisting that the Horn of Africa nation will continue to partner with friendly countries to get out of the debt trap which has caused massive setbacks in the economic front.

"Signed a debt relief agreement with the Govt of Russia represented by the Deputy Finance Minister, Timur Maksimov. The signing of this agreement — just over $ 684 million and 7.5 blocked funds—will accelerate Somalia’s efforts to reach the HIPC Completion Point in a timely manner," he said.

"This marks a significant step towards the completion of Somalia's debt relief process. The signing took place ahead of the Africa-Russia summit, which will be attended by a large delegation led by the Deputy Prime Minister, Salah Jama," state media added in a statement.

From today, at least 17 African countries are expected to converge at St. Petersburg for the Russia-Africa summit This will be the second summit after the 2019 edition, which elicited a sharp reaction from the West, particularly the US which has been competing for strategic interests in Africa.

The Horn of Africa nation is also actively fighting against Al-Shabaab militants who have affected trade, security, and governance, thus the support from international partners. Russia is also trying to make inroads into the continent following massive interests from the US and China, who are competing for raw materials and military presence.

GAROWE ONLINE