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The United States and Somalia reached an agreement on Tuesday for Washington to cancel more than US$1 billion in debt owed by the troubled Horn of Africa nation.
The announcement came a day after the parliament in Somalia, which is heavily dependent on international aid, approved a US$1.36 billion national budget for 2025.
Somalia is one of the poorest countries on the planet, enduring decades of civil war, a bloody insurgency by the al-Qaeda linked jihadist group al-Shabab, and frequent climate disasters.
Tuesday’s deal was signed by Somalia’s Finance Minister Bihi Egeh and the US ambassador to Mogadishu, Richard Riley, who described it as a “great day”.
Riley said at a signing ceremony that the bilateral agreement forgives Somalia’s US$1.14 billion debt to the United States.
This was, he said, the largest single component of a total of US$4.5 billion in debt owed to multiple countries that was forgiven under a deal with the International Monetary Fund and World Bank in December.