The Arab League has approved a landmark decision to exempt Somalia from 75% of its accumulated debt owed to the organization, marking a major step in easing the country’s financial burden.
The decision was announced during the League’s 164th session at the level of permanent representatives, chaired by the United Arab Emirates in Cairo.
A Historic Decision for Somalia
Somalia’s Ambassador to the Arab League, Ali Abdi Aware, hailed the move as a “historic achievement”, emphasizing that it reflects strong Arab solidarity with Somalia during a time of severe economic and humanitarian challenges.
He expressed gratitude to Arab member states and Secretary-General Ahmed Aboul Gheit for their support, noting that the decision follows President Hassan Sheikh Mohamud’s directives to reduce the nation’s debt load.
Supporting Somalia’s Recovery and Development
The debt relief will enable the Somali government to redirect resources towards national security, social services, and development projects, aligning with the country’s national development plan.
The decision also comes as part of the Arab League’s broader commitment to support Somalia in overcoming decades-long challenges, including poverty, conflict, and climate-related disasters.
Linked to Global Debt Relief Efforts
This Arab League initiative complements ongoing international efforts to ease Somalia’s external debt.
In March 2024, the Paris Club canceled over $2 billion of Somalia’s debt, following the IMF and World Bank’s December 2023 approval of $4.5 billion in debt relief.
These steps have drastically reduced Somalia’s external debt from 64% of GDP in 2018 to less than 6% by the end of 2023, under the Heavily Indebted Poor Countries (HIPC) initiative.
Somalia’s Economic and Humanitarian Reality
Somalia, a member of the Arab League since 1974, remains one of the poorest countries in the world, with 70% of its population living on less than $1.90 per day, according to the World Bank.
The country continues to face complex challenges, including decades of civil war, the insurgency of Al-Shabaab, and recurring climate shocks such as droughts and floods that affected 170,000 people in 2024 alone.
Arab League’s Longstanding Role in Somalia
Over the years, the Arab League has supported Somalia in healthcare, education, and infrastructure—providing ambulances, rehabilitating schools, and developing hospitals in Mogadishu.
In 2018, the League called on its institutions, including the Arab Parliament, to back Somalia’s development plan and budget.
In 2021, it urged the international community to assist Somalia in combating drought, hosting joint meetings with the United Nations to coordinate aid.
Looking Ahead: Somalia’s Fiscal Goals
With its 2025 budget reaching $1.356 billion, the Somali government aims to strengthen domestic revenue sources, reduce dependency on foreign aid, and prioritize stability and security.
While challenges remain, the recent Arab League decision represents a crucial step in easing the financial pressures on the nation and supporting its long-term path to recovery and development.
