Somalia has signed a $306.5 million debt relief agreement with the Arab Monetary Fund (AMF), marking a major step forward in the country’s ongoing economic reform agenda, according to officials in Mogadishu.
The agreement, signed Wednesday in Kuwait, involves the restructuring of Somalia’s debt to the Abu Dhabi-based financial institution, which supports economic development and financial stability among Arab member states. While the AMF did not disclose the specific terms of the restructuring, Somalia’s Ministry of Finance hailed the deal as a “critical milestone” in the nation’s recovery process.
Finance Minister Bihi Egeh described the agreement as “fundamental to re-engagement with the fund” and a crucial step toward achieving long-term debt sustainability. “This deal reflects the growing international confidence in Somalia’s economic trajectory and our commitment to reform,” Egeh said in a statement carried by state news agency SONNA.
The Horn of Africa nation, which has endured decades of civil war, political instability, and climate-related shocks including droughts, floods, and locust outbreaks, is working to rebuild its economy and restore financial credibility on the global stage.
Last year, Somalia secured the cancellation of 99% of its debt to Paris Club creditor nations, a significant breakthrough in its efforts to normalize relations with the international financial community.
The AMF deal is expected to enhance Somalia’s ability to attract future investment, unlock access to development financing, and strengthen its engagement with multilateral institutions.
Observers see the agreement as further evidence that Somalia’s fiscal and institutional reforms are beginning to yield results, even amid ongoing security and humanitarian challenges.