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Debt treatment -
March 13, 2024

Supporting agreements with the international institutions

Total external debt of the country

$3 866 million as of January 31, 2022

$2 043 million of which being due to Paris Club as of January 1, 2023

Amounts treated

$2 042 million of which $1 227 million being cancelled and $815 million being rescheduled

Accorded treatment

Debt cancellation, the Federal Republic of Somalia having reached its Completion Point under the enhanced initiative for the Heavily Indebted Poor Countries (enhanced HIPC Initiative) on December 13, 2023

Categories of debt treated

Treatment of the stock as of January 1, 2023

Repayment profile

Treatment under HIPC Initiative Exit terms

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.

Comparability of treatment provision

The Federal Republic of Somalia was declared eligible to the Enhanced HIPC Initiative by the IDA and the IMF in February 2020 and was declared to have reached its Completion Point in December 2023. In this context, the Federal Republic of Somalia commits to seek promptly from all its external creditors which are not participating in the Agreed Minutes dated March 13, 2024, their appropriate contribution in terms of debt relief to the Enhanced HIPC Initiative, on top of traditional debt relief mechanisms and consistent with the proportional burden sharing based on their relative exposure in net present value of total external debt at Decision Point after the full use of traditional debt relief mechanisms.

Whether the debt relief provided is appropriate will be assessed not only on the basis of the reduction in the net present value of the debt as computed under Appropriate Market Rate, but also on the terms of repayment of the debts not cancelled. For this purpose, all relevant elements will be taken into account, including the level of cash payments received by those creditors as compared to their share in the Federal Republic of Somalia’s external debt; the nature and characteristics of all treatment applied, including debt buy backs; all characteristics of the reorganized claims and in particular their repayment terms regardless of the forms they take; and, more generally, the financial relations between the Federal Republic of Somalia  and all its other creditors.

Consequently, the Federal Republic of Somalia commits not to accord any category of external creditors -and in particular litigating creditors, creditor countries not participating in the Agreed Minutes dated March 13, 2024, commercial banks, suppliers and bondholders- a treatment more favourable than that accorded to the Participating Creditor Countries.

Cut-off date

1 October 1984

Organisation of the session

The agreement was signed by Mr. Bertrand Dumont, Chairman of the Paris Club and Director General of the Treasury and Mr. William Roos, Co Chairman and Assistant Secretary at the Directorate-General of the Treasury.

The head of the debtor country was H.E. Bihi Iman Egeh, Minister of Finance.


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