MOGADISHU, Dec. 4 (Xinhua) -- The African Development Bank Group (AfDB) said it has approved additional debt relief for Somalia, paving the way for full cancellation of all African Development Fund loans to the country covering the 2024-2039 period.
The lender said the approval follows Somalia's strong progress on macroeconomic reforms, public financial management, domestic revenue mobilization, and governance.
"Debt relief opens the door for stronger institutions, better services, and brighter prospects for Somali citizens with impacts felt in classrooms, clinics, farms, and markets across the country," AfDB Lead Operations Advisor for Somalia Bubacarr Sankareh said in a statement issued on Wednesday.
According to the AfDB, Somalia has also met its poverty reduction commitments by improving basic service delivery and expanding safety nets for vulnerable households.
The bank said the debt relief, following the successful completion of the Enhanced Heavily Indebted Poor Countries Initiative process, will reduce Somalia's external debt by 17.68 million U.S. dollars.
Launched in 1996 by the World Bank Group, the initiative works to reduce unmanageable debt burdens for participating countries that meet strict criteria and commit to poverty reduction policies, enabling them to focus on economic growth and poverty reduction.
It said the Somali government is expected to reallocate resources to fund public services, infrastructure rehabilitation, and essential social programs.
"Funds will also be used to expand teacher recruitment, support clean water access, and accelerate health system restoration in regions affected by drought and conflict. Debt relief will also reinforce economic resilience," it said.
The move will also strengthen Somalia's creditworthiness, restore confidence among development partners, and unlock concessional financing for long-term reconstruction.
