Echoes from the field

The African Legal Support Facility Assists the Federal Republic of Somalia in the Sovereign Debt Sector

With the assistance of the African Legal Support Facility (ALSF), Paris Club creditors agreed to cancel USD 1.4 Billion of Somali debt, leading the Federal Republic of Somalia to the enhanced Highly Indebted Poor Countries (HIPC) Initiative Decision Point.


The Government of the Federal Republic of Somalia has undertaken various political, social and economic reforms over the past eight years in order to achieve debt sustainability. These reforms have contributed to Somalia’s successful completion of three International Monetary Fund (IMF) Staff-Monitored Programs (SMPs) and to the implementation of an ongoing fourth SMP. As a result of these reforms and SMPs, the IMF and the World Bank determined that Somalia has taken the necessary steps to qualify for debt relief under the enhanced HIPC initiative.

In preparation for the Decision and Completion Points for the HIPC initiative, the IMF and the World Bank required the Government to re-negotiate and restructure its debt with its current creditors, including members of the Paris Club, which accounts for approximately 58% of the country’s debt.

It is within the aforementioned context that the Government requested technical and financial assistance from the ALSF. In response, the ALSF engaged technical and financial advisors to support the Government in negotiations with the country’s Paris Club creditors.

Somalia and its Paris Club creditors successfully conducted and concluded the first ever virtual Paris Club negotiations on 31 March 2020. These negotiations resulted in Somalia’s receiving debt relief in the amount of USD 1.4 Billion. The relief took the form of the cancellation of approximately 67% of the country’s Paris Club debt. Following the negotiations, it is expected that Somalia will receive further debt relief on a bilateral basis, eventually leading to 100% debt cancellation and bringing the country closer to the HIPC Initiative Completion Point.

Debt relief for Somalia will help the country achieve stability and to reach its long-term developmental goals and needs.

About the ALSF

Created by the African Development Bank in 2010, the ALSF supports governments in negotiating complex commercial transactions, providing legal and technical assistance in public-private partnership projects across the oil and gas, mining and energy sectors, and covering sovereign debt issues and creditor litigation.


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