The African Development Bank Group has granted full debt relief to Somalia after the country successfully completed the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative. This decision clears all African Development Fund loans for the period 2024 to 2039 and will reduce Somalia’s external debt by $17.68 million, creating much-needed fiscal space to support development priorities.
The debt cancellation marks a major milestone in Somalia’s economic recovery journey, reflecting the nation’s progress in macroeconomic reforms, public financial management, domestic revenue mobilisation, and governance. It also acknowledges Somalia’s commitment to poverty reduction through improved service delivery and expanded safety nets for vulnerable communities.
Bubacarr Sankareh, Lead Operations Advisor for Somalia at the Bank Group, praised the achievement, stating that Somalia has earned this moment through discipline and determination. He noted that the relief will strengthen institutions and improve essential services, with benefits felt in education, healthcare, agriculture, and local markets.
With the debt burden lifted, the government plans to reallocate savings to public services, infrastructure restoration, and community development programs—expanding teacher recruitment, improving access to clean water, and rebuilding health systems in regions affected by drought and conflict. The relief is also expected to boost Somalia’s creditworthiness, renew confidence among international partners, and unlock concessional financing to support long-term reconstruction and economic resilience.
This milestone follows Somalia’s clearance of arrears worth $122.6 million to the Bank Group in 2020 and reforms pursued to meet HIPC requirements. Reaching the HIPC completion point in December 2023 triggered full debt relief support from the AfDB, IMF, and World Bank, reducing the country’s total external debt from $5.2 billion in 2018 to an estimated $557 million.
With reduced debt vulnerability, Somalia is now positioned to accelerate its National Transformation Plan (NTP-1) and shift focus from humanitarian dependency to sustainable, state-led development.
