Mogadishu, Somalia — The Paris Club of Creditors has reached an agreement with the government of Somalia that will result in the cancellation of up to $2 billion of the country's debt- approximately 99% of the debt owed by the country to the group.
The move comes following Somalia's completion of the Enhanced Heavily Indebted Poor Countries Initiative of the IMF where the country was exiled from the international financial system for about 30 years. "In addition, Paris Club creditors confirmed their willingness to grant additional debt cancellation on a voluntary and bilateral basis for an amount of USD 815 million."
Furthermore, the club welcomed Somalia's commitment to poverty eradication, education, and health reforms to create a foundation for sustainable economic growth.The Heavily Indebted Poor Countries initiative was launched in 1996 and during that period has canceled debt to the tune of $120 billion for 36 out of 39 qualified countries. Somalia is the 37th country to benefit from the initiative.
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