Somalia has signed a Ksh.39.6 billion (approximately $305 million) debt relief agreement with the Arab Monetary Fund (AMF). The deal marks a vital milestone in the Horn of Africa nation’s ongoing economic reform efforts, as it seeks to overcome decades of internal conflict and natural disasters that have left its economy in disarray.
Signed in Kuwait on Wednesday, the agreement focuses on the restructuring of Somalia’s debt owed to the AMF. While specific details of the restructuring have not yet been disclosed, the AMF confirmed in a statement that the deal is part of efforts to foster financial stability and development in its member states. Based in Abu Dhabi, the AMF plays a pivotal role in supporting Arab countries through policy advice, financial assistance, and technical cooperation.
Somalia’s Finance Minister, Bihi Egeh, hailed the agreement as “crucial” to the country’s debt relief journey and emphasized its importance for re-engagement with international financial institutions. “This agreement is fundamental to our partnership with the Arab Monetary Fund and reflects the progress we have made in implementing tough but necessary economic reforms,” Egeh said.
The country, which has been grappling with the aftermath of prolonged civil war, is also recovering from a series of environmental calamities, including severe droughts, devastating floods, and locust invasions. These challenges have further strained Somalia’s fragile economy and heightened the need for international financial support.
The latest deal comes on the heels of a major breakthrough last year, when Somalia secured the cancellation of 99 percent of its debt owed to the Paris Club of creditor nations. That milestone was widely seen as a critical step in Somalia’s return to the global financial fold.
According to Somalia’s state-run news agency SONNA, the agreement with the AMF demonstrates “growing international confidence in Somalia’s economic trajectory and reform efforts,” signaling a new chapter in the country’s journey toward economic stability and growth.
