# Somalia's debt and debt relief > How Somalia cleared most of its foreign debt: the old debt, the HIPC debt relief process from 2020 to 2023, the Paris Club, and who Somalia owes today. Source page: https://calankii.com/en/economy/debt-and-debt-relief/ Last checked: 2026-11-12 Publisher: Calankii (https://calankii.com) ## Where the debt came from Most of Somalia's foreign debt was borrowed by the government before 1991. When the state collapsed, payments stopped, and unpaid interest and penalties kept adding to the total for three decades. By the end of 2018 the debt stood at about **$5.2 billion** ([World Bank, 25 March 2020](https://www.worldbank.org/en/news/press-release/2020/03/25/somalia-to-receive-debt-relief-under-the-enhanced-hipc-initiative)), equal to 61 to 67 percent of GDP ([Central Bank of Somalia, Annual Report 2025](https://centralbank.gov.so/wp-content/uploads/2026/08/Annual-Report_2025.pdf)). While these old debts stayed unpaid, Somalia could not borrow from the World Bank or IMF on normal terms. ## How the debt was cleared Debt relief came through the **Heavily Indebted Poor Countries (HIPC) Initiative**, a programme run by the IMF and World Bank. - **March 2020 (Decision Point):** Somalia became the 37th country to qualify. The IMF and World Bank agreed its debt would be cut from $5.2 billion to $557 million in present-value terms once reforms were done ([World Bank, 25 March 2020](https://www.worldbank.org/en/news/press-release/2020/03/25/somalia-to-receive-debt-relief-under-the-enhanced-hipc-initiative)). On 31 March 2020 the Paris Club of creditor countries cancelled $1.4 billion straight away ([Paris Club](https://clubdeparis.org/sites/default/files/node/field_news_files/prsomalia20200331.pdf)). - **2020 to 2023:** Somalia carried out the agreed reforms under IMF programmes, including on budgets, revenue, the Central Bank and public financial management. - **13 December 2023 (Completion Point):** the IMF and World Bank boards confirmed debt relief worth **$4.5 billion** in debt-service savings ([IMF, 13 December 2023](https://www.imf.org/en/News/Articles/2023/12/13/pr23438-imf-and-world-bank-announce-us-4-5-billion-in-debt-relief-for-somalia)). - **March 2024:** Paris Club creditors cancelled most of what was still owed to them ([Eastleigh Voice](https://eastleighvoice.co.ke/regional/25303/relief-for-somalia-as-paris-club-creditor-nations-cancel-99-per-cent-of-debt)). ## The debt today All figures from the [Central Bank of Somalia, Annual Report 2025](https://centralbank.gov.so/wp-content/uploads/2026/08/Annual-Report_2025.pdf): - **Total foreign public debt:** $1,482 million at the end of 2025, about **11 percent of GDP**. - **Non-Paris Club countries:** $799 million (54 percent). These countries are outside the Paris Club deal, so Somalia must agree relief with each one separately. - **Multilateral lenders** (such as the IMF, World Bank and African Development Bank): $634 million (43 percent). - **Paris Club countries:** $46 million (3 percent), down from $3,072 million in 2019. - **Commercial lenders:** under 1 percent. The debt fell 37 percent in 2023 and 46 percent in 2024, then only 2 percent in 2025, as the main relief deals were finished (same source). ## What changed after relief - Somalia can again get low-cost loans and grants from the World Bank's IDA. The World Bank's portfolio in Somalia is about **$2.34 billion** ([World Bank, Somalia](https://www.worldbank.org/so)). - The IMF approved a new three-year Extended Credit Facility of about $100 million in December 2023 ([IMF, 13 December 2023](https://www.imf.org/en/News/Articles/2023/12/13/pr23437-imf-concludes-the-sixth-review-of-the-extended-credit-facility-for-somalia)). - Somalia joined Afreximbank in 2025 and is building a stock exchange ([African Business](https://african.business/2025/03/apo-newsfeed/somalia-joins-afreximbank-as-it-seeks-to-boost-intra-african-trade-and-economic-growth-2); [MFW4A](https://www.mfw4a.org/news/somalia-launches-its-first-stock-exchange-mogadishu)). ## Why it matters For thirty years, debts from before 1991 blocked the country from normal finance. Clearing them was the work of many people across several governments, the Central Bank, the Ministry of Finance and international partners. The Central Bank says the lower debt "created additional fiscal space for development priorities" ([Central Bank of Somalia, Annual Report 2025](https://centralbank.gov.so/wp-content/uploads/2026/08/Annual-Report_2025.pdf)). ## Sources disagree Reports give different amounts for the March 2024 Paris Club cancellation, from about $1.2 billion to more than $2 billion, depending on whether amounts are counted at face value or in present value and whether earlier cancellations are included ([China Daily](https://chinadailyhk.com/hk/article/381121); [Arise News](https://arise.tv/somalia-granted-over-2bn-debt-relief-by-paris-club-to-boost-economic-recovery-efforts)). --- I want to help with this: email hello@calankii.com. Fix this page: email hello@calankii.com with the page link and your source.