The U.S. has agreed to cancel more than $1 billion of Somalia’s debt in a deal signed Tuesday.
This comes after Somalia’s parliament approved a $1.36 billion national budget for 2025, a key step in the country’s recovery efforts.
Somalia, one of the poorest nations, has been plagued by civil war, an Al-Shabaab insurgency, and natural disasters.
The agreement was signed by Somalia’s Finance Minister Bihi Egeh and U.S. Ambassador Richard Riley, who called it a “great day” for Somalia.
The forgiven debt is part of a broader $4.5 billion relief program from the IMF and World Bank.
Along with the debt relief, the U.S. has provided $1.2 billion in aid to Somalia this year.
Despite progress, Somalia faces challenges, including grain supply disruptions from the Ukraine war and ongoing droughts.
Its external debt has fallen from 64% of GDP in 2018 to under 6% by 2023.
