US Cancels $1.1bn of Somalia’s Debt in ‘Historic’ Financial Agreement

Somalia has announced that more than $1.1bn (£860m) of outstanding loans will be cancelled by the US, a sum representing about a quarter of the country’s remaining debt. The announcement is the latest in a series of agreements in which Somalia’s creditors have committed to forgiving its debt obligations. Most of Somalia’s debt had built up during the era of Siad Barre’s military dictatorship, which collapsed in the early 1990s and triggered a ruinous three-decade civil war…Harry Verhoeven, an expert on the political economy of the Horn of Africa, said Somalia’s debt forgiveness was “meaningful” as it “enables Somalia to more readily access public financing” from multilateral development banks. However, he said private creditors were likely to remain cautious due to lingering concerns about “financial governance and political instability”. (The Guardian)