Somalia has disclosed clearance of its arrears to World Bank Group.
The Federal Government of Somalia disclosed this on Monday March 9th, 2020.
With this clearance, Somalia has fully re-established its access to new resources from IDA and paved the way to receive debt relief under the Heavily Indebted Poor Country (HIPC) and Multilateral Debt Relief Initiative (MDRI) to promote growth and recovery over the coming years.
“I congratulate the Federal Government on reaching this critical milestone that will allow Somalia to access the strongest possible support from the World Bank Group to improve peoples’ lives,” said Axel van Trotsenburg, World Bank Managing Director of Operations .
“This lays the foundations for long term economic and social recovery. I would also like to thank the Government of Norway for its generosity in facilitating the arrears clearance process,” he added.
The payment of these arrears was made possible through a $365.9 million bridge loan from the Norwegian government.
This effort is part of a comprehensive plan for arrears clearance that also includes the International Monetary Fund (IMF) and the African Development Bank.
“I am pleased that Norway is contributing in a smart and constructive way to Somalia’s efforts to reengage with the international community, clear arrears and restore access to concessional funding from IDA. I am also pleased that this important step paves the way for Somalia to receive deep relief on its remaining debt,” said Ine Eriksen Soreide, Minister of Foreign Affairs of Norway.
The clearance of IDA’s arrears is an opportunity to lock in Somalia’s turnaround.
“As we enter this new course, we look forward to strengthening our collaboration with the World Bank Group and building on the pillars we have laid so far to boost the economy and bring prosperity to our people,” said H.E.M. Abdirahman D. Beileh, Minister of Finance of the Federal Republic of Somalia.
In a meeting of the Bank’s Board last week, Executive Directors expressed support for the government’s strong record of fiscal, political, social and economic reforms in recent years which enabled Somalia to reach this major milestone.
They noted their expectation that in addition to accessing new IDA resources, Somalia would also work with the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) to support the development of its private sector.
The International Development Association (IDA) is one of the largest sources of funding for fighting extreme poverty in the world’s poorest countries. IDA provides zero- or low-interest loans and grants to countries for projects and programs that boost economic growth, build resilience, and improve the lives of poor people around the world.
Since 1960, IDA has provided more than $391 billion for investments in 113 countries. As an institution of the World Bank Group, IDA combines global expertise with an exclusive focus on reducing poverty and boosting prosperity in the world’s poorest countries.