IMF Says Donors May Partly Forgive Somalia's $5.3-Billion Debt
- Cancelation depends on good governance, clearing arrears
- State will circulate shilling notes to bolster monetary policy
A crowd carry old notes during a demonstration against record-high inflation on May 5, 2008 in the country's capital, Mogadishu. At least five demonstrators were killed on May 5, when Somali security forces fired at crowds protesting rising food prices in Mogadishu, witnesses said. About 7,000 protestors accused unscrupulous traders of rejecting the Somali shilling in favor of the US dollar, thus pushing inflation to historic heights since the government collapsed 17 years ago. AFP PHOTO/ MUSTAFA ABDI (Photo credit should read MUSTAFA ABDI/AFP/Getty Images)
Photographer: Mustafa Abdi/AFP via Getty ImagesThe International Monetary Fund says creditors may forgive part of Somalia’s outstanding $5.3 billion debt if the strife-torn Horn of Africa state takes concrete steps toward reforming its economy and improving governance.
Somalia, gripped by a three-decade civil war, would have to first clear arrears owed to the IMF, the World Bank and the African Development Bank, according to IMF’s country head Samba Thiam. An arrears-clearance plan, a new currency, an effective monetary policy and a “solid track record” on good governance may lead to fresh funding, Thiam said in an interview Feb. 17 in Nairobi, the capital of neighboring Kenya.