MOGADISHU, March 26 (Xinhua) -- Somalia is set to normalize financial ties with the International Monetary Fund (IMF) and World Bank after making necessary steps to begin receiving debt relief under the heavily indebted poor countries (HIPC), the two lenders said.
The two lenders said in a joint statement issued on Wednesday evening that debt relief will help Somalia reduce its external debt from 5.2 billion U.S. dollars at the end of 2018 to 557 million dollars once it reaches the HIPC Completion Point in about three years' time.
World Bank Group President David Malpass welcomed Somalia's efforts to restore stability, engage with creditors, and adopt a poverty reduction strategy.
"Resumption of regular financing to Somalia is an important landmark, and we look forward to further economic and social progress," Malpass said.
Somalia, which is continuing its path towards stability and development after 30 years outside the international financial system, is the 37th country to reach this milestone, known as the HIPC Decision Point.
According to the two lenders, Somalia's immediate normalization of its ties with the global community will re-open access to critical additional financial resources to strengthen the economy, help improve social conditions, raise millions out of poverty, and generate sustainable employment for Somalia's people.
Somali Prime Minister Hassan Ali Khaire said the government was pleased by the latest move by the two lenders which allows Somalia to fully re-engage with global financial institutions.
"This decision is an important milestone which presents ample opportunities for Somalia as it relentlessly pursues its ongoing reform processes as well as its recovery and development agenda," Khaire said, noting that the journey required hard work, dedication and partnership," he added, and lauded the two lenders and partners for their support.
The two lenders said Somalia has committed to maintaining macroeconomic stability, implementing a poverty reduction strategy, and putting in place a set of reforms focused on fiscal stability, improving governance and debt management, strengthening social conditions, and supporting inclusive growth in order to reach the HIPC Completion Point.
Kristalina Georgieva, IMF managing director, said successful reform efforts have laid the foundation for inclusive economic growth and for addressing the needs of the country's most vulnerable people.