Russia exempts Somalia from its debts

 Somali Finance Minister Bihi Iman Aiji said that Russia has forgiven his country of debts of more than $684 million in an agreement reached on the sidelines of a Russian-African summit in St. Petersburg.

After decades of civil war, Somalia, located in the Horn of Africa, is seeking comprehensive external debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative of the International Monetary Fund and the World Bank.

"This step will play a major role in completing the country's debt forgiveness process," Somali Finance Minister Bihi Iman Aiji said of the agreement with Moscow in a post on the ministry's Facebook page.

Somali Deputy Prime Minister Salih Ahmed Jameh indicated that the agreement signed yesterday, Wednesday, between Aiji and Russian Deputy Finance Minister Timur Maximov relates to Paris Club loans. Gamea added that under the agreement, part of the debt will be written off immediately, while another part will be subject to rescheduling.

The agreement with Somalia comes as Russian President Vladimir Putin seeks to take advantage of the St. Petersburg summit to boost relations with African countries and counter Western efforts to isolate Moscow over its military operation in Ukraine.

Putin told African leaders on Thursday that he would give them tens of thousands of tons of grain within months, despite Western sanctions, which he said made it difficult for Moscow to export grain and fertilizer.

Last October, the International Monetary Fund said that if Somalia continues to make progress on reforms, it may reach the point of completion of the Heavily Indebted Poor Countries Initiative process by the end of 2023, which would enable it to reduce its debt to about $550 million from $5.2 billion.

According to data from the International Monetary Fund, Somalia owed Moscow about $695 million in 2019. In another context, the Russian Foreign Minister, Sergey Lavrov, recently confirmed his country's readiness to meet Somalia's military and technical needs, in order to combat terrorism, in a press conference, after His talks with his Somali counterpart, Abshir Omar Horosi.