WASHINGTON, March 31 (Reuters) – The Paris Club, an informal group of wealthy industrialized countries, on Tuesday agreed to forgive at least 67% of the debts they are owed by Somalia, or around $1.4 billion, a source familiar with the negotiations said.
“The representatives of the Paris Club creditor countries agreed on 31 March 2020 with the Government of the Federal Republic of Somalia to restructure its external public debt,” the creditor grouping said in a statement.
Somali Finance Minister Abdirahman Beileh on Tuesday welcomed a decision by the Paris Club, an informal group of wealthy industrialized countries, to forgive at least $1.4 billion, or 67% of the debt owed by the Horn of Africa country.
“We had very productive discussions with the Paris Club and we welcome their support in relieving Somalia of a substantial amount of its debt to them,” Beileh told Reuters.
He said the Somali government would hold separate bilateral discussions with the creditors to finalize the process. He said his government would continue the economic reforms that enabled the debt relief decision.
The Horn of Africa country must now meet with each creditor country separately to finalize the details. Some could extend even more generous debt forgiveness terms, said the source, who was not authorized to speak publicly.
The International Monetary Fund and the World Bank last week said Somalia had taken the necessary steps to begin receiving debt relief, paving the way for Tuesday’s negotiations, which took place via video conference and stretched for over nine hours.