US inks bilateral agreement with Somalia, pledges debt relief

MOGADISHU, Somalia - The US has signed a bilateral agreement with Somalia, in yet another significant move that gives the Horn of Africa yet another opportunity to reform her dwindling financial fortunes, which have seen the country struggle to spearhead landmark development.

At Mogadishu on Sunday, US ambassador Donald Yamamoto led the event which also saw Somali Finance Minister Abdirahman Beileh and newly appointed Prime Minister Mohamed Hussein Roble gracing the event. It was the first-ever official deal to be witnessed by Roble.

The bilateral agreement, the US embassy said, involved reducing and restructuring debt owed by the Federal Government of Somalia [FGS] to three U.S. government agencies. One of the agencies is the Paris Club Debt which has been financing projects in the Horn of Africa nation for a couple of years.

"Signing this agreement was possible because Somalia has implemented significant economic reforms in recent years and in March 2020 reached the first stage of debt relief, known as “Decision Point,” through the Heavily Indebted Poor Countries Initiative. When Somalia reaches the final stage, “Completion Point,” the United States will have forgiven more than $1 billion in debt," the US said.

"We commend the FGS on its progress in pursuit of economic reform. Working through the debt relief process will allow Somalia to regain access to financial support from international financial institutions so that it can invest in poverty reduction and economic growth," added the statement from the US embassy.

For decades now, the US has been supporting Somalia in boosting the local economy besides streamlining security in the country. In fact, a good number of the Somali National Army [SNA] soldiers are paid by Washington DC, which conducts training of the Special Forces commonly known as Danab.

To help the country fully defeat the Al-Shabaab militants, the US has also been conducting airstrikes in several parts of the country. Washington insisted that the commitment to continue helping Somalia remains unbowed, adding that special emphasis should be put on the economic recovery programs.

"The United States remains a committed partner to Somalia and is pleased to play a role in ensuring the economic success of the people of Somalia," added the statement, which comes just a few weeks after Al-Shabaab militants raided a US base in Jubaland.

Beileh hailed the US for continued support, adding that the US has remained a close from of Somalia throughout the turmoil. He said the debt relief will allow Somalia to regain her control in the economic front, arguing that the relief would also allow the country to reach out to other international lenders for support.

"Today I witnessed the historic signing of the debt relief agreement between Somalia and the USA during my bilateral meeting with Ambassador Yamamoto of US2SOMALIA. America is a steadfast supporter of Somalia's reforms and development. We are grateful for this partnership," he wrote.

GAROWE ONLINE