Somalia creditors agree to cancel $2 billion of debt

A Somali woman arranges watermelons for sale at an open-air grocery market as Muslims start the fasting month of Ramadan, the holiest month in the Islamic calendar, in Warta Nabada District of Mogadishu, Somalia March 11, 2024. (File/Reuters)
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Updated 14 March 2024
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Somalia creditors agree to cancel $2 billion of debt

  • Paris Club, an informal grouping of creditor nations, said $2 billion represented 99 percent of the debt owed by Somalia

NAIROBI: Somalia has secured an agreement with international creditors to cancel more than $2 billion (1.8 billion euros) in debt, the Paris Club of creditor nations said.
The deal announced Wednesday came after the International Monetary Fund and the World Bank in December approved $4.5 billion in debt relief for the troubled Horn of Africa nation.
Somalia is one of the poorest countries on the planet, enduring decades of civil war, a bloody insurgency by the Al-Qaeda linked jihadist group Al-Shabab, and frequent climate disasters.
The Paris Club, an informal grouping of creditor nations, said in a statement that the $2 billion represented 99 percent of the debt owed by Somalia to its members as of January 2023.
Those involved in the deal included representatives of the United States and Russia as well as European nations such as Britain and France.
“Paris Club creditors welcomed the Federal Republic of Somalia’s determination to continue to implement a comprehensive poverty reduction strategy and an ambitious economic reform program to create the foundations for sustainable, inclusive economic growth,” the Paris club said.
Somalia’s government “committed to use the fiscal space provided by this debt treatment for priority expenditure areas (health, education and basic infrastructure) identified in the country’s poverty reduction strategy,” it added.
Around 70 percent of Somalia’s population lives on less than $1.90 a day, according to World Bank figures.
The December IMF-World Bank deal came as Somalia reached the “completion point” of a debt management scheme known as the Heavily Indebted Poor Countries Initiative (HIPC).
Somalia’s external debt has fallen from 64 percent of gross domestic product in 2018 to less than six percent by the end of 2023, the IMF said at the time.
In March, the IMF it expected Somalia’s GDP to increase by 3.7 percent this year, from an estimated 2.8 percent in 2023.
“Growth is expected to strengthen in 2024 supported by continued recovery in agriculture, remittances, and investment, though risks remain,” it said.


Foreign truckers ‘in God’s hands’ in militant-hit Mali

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Foreign truckers ‘in God’s hands’ in militant-hit Mali

KIDIRA: Amath Mboup, a young Senegalese, is haunted by the charred and decomposing bodies of fellow truckers killed by jihadists lying along the highway to the Malian city of Kayes.
Since September, fighters from the Al-Qaeda-linked Group for the Support of Islam and Muslims, known by its Arabic acronym JNIM, have sought to cripple landlocked Mali’s economy and undermine its junta.
They have been blocking and sometimes attacking fuel tankers entering Mali and placing total blockades on certain strategic routes leading to the capital Bamako.
Hundreds of tankers from Abidjan, Ivory Coast’s economic capital, and the Senegalese capital Dakar have been set ablaze.
Dozens of drivers have been killed or kidnapped, particularly on the Kayes-Bamako road in the west of the country, near the border with Senegal.
After waiting two days for routine checks in the Senegalese border town of Kidira, one of the main crossing points between Senegal and Mali, Mboup — who is in his thirties — was preparing to travel onwards to Bamako, his truck loaded with goods.
Alone in the truck, where amulets hang to ward off bad luck, Mboup was apprehensive as he is every time he takes this route.

- ‘Everyone is afraid’ -

“Everyone is afraid to take this road because it’s too risky: You know you’re leaving, but you don’t know if you’ll come back alive,” he told AFP, his face dusty and pale with fatigue.
Malick Bodian, another Senegalese driver, told AFP he is always putting his life “in God’s hands.”
“Your mind is never at peace when you travel this road. You think you could be attacked at any moment,” he said.
Many of the truckers interviewed by AFP said there was no question of quitting their jobs.
“We don’t have a choice. It’s the only job I know how to do to feed my family,” said Mboup, a married father of two.
Behind him, dozens of trucks, engines rumbling, were lined up for several kilometers waiting to leave Senegal for the bumpy Malian roads and all their potential dangers.
Fuel tankers were not among the trucks, however. Last November, JNIM claimed in a propaganda video that all tanker drivers would henceforth be considered “military targets.”
The drivers in line were Senegalese, Malian, Ivorian and Burkinabe and many said they had encountered militants on their journeys.
“They often appear out of nowhere in the forest on motorcycles and are usually wearing turbans and heavily armed,” Malian driver Moussa Traore said.
“When you see them, you’re the one who slows down. Sometimes they stop you to ask for your documents, other times not,” he said.

- Obstacle course -

Mali imports most of its requirements, including fuel, fish, fruit and vegetables, by road from Senegal, Mauritania or Ivory Coast. More than 70 percent of its imports transit through Dakar port.
JNIM is waging a form of “economic jihad” in western Mali, aiming to destabilize the region by “targeting vital logistics routes,” according to a 2025 report by the Timbuktu Institute think tank.
Traveling on certain roads in Mali such as the one to Kayes has become an obstacle course.
“The flow of trucks that used to pass through Kidira is no longer the same,” said Modou Kayere, an official with the West African Truck Drivers Union, which represents some 15 countries.
In late November, Senegalese authorities reported that nearly 2,500 shipping containers filled with goods destined for Mali were blocked at Dakar port due to the security situation.
According to most of the drivers interviewed by AFP, vehicles carrying goods are rarely attacked by militants, unlike fuel tankers.
But the risk is real and the drivers are trying to adapt.
They have decided to stop driving at night and some have even set up alert networks on WhatsApp to warn their peers of danger on the road.