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Somalia - Joint World Bank-IMF Debt Sustainability Analysis (English)

This debt sustainability analysis (DSA) provides an update of the March 2020 DSA. Total public debt early all of which is external. The revised baseline scenario takes the authorities’ end-2019 debt stock data, includes the interim assistance received at the HIPC Decision Point in March 2020, and incorporates the impact of the three natural shocks that Somalia is confronting-flooding, locusts, and the coronavirus pandemic. The present value of external debt is now some fifteen percentage points of GDP lower at around sixty percent of GDP, thanks in large part to interim relief, but it remains well above the thirty percent threshold for countries like Somalia with weak capacity to manage debt. The baseline forecast also indicates substantial and sustained breaches of the present value (PV) of external debt-to-exports indicative threshold. The PV of external debt service-to-exports threshold, and the debt service-to-revenue threshold, also see sustained breaches beyond 2023, highlighting the risks of any delay in reaching the Heavily Indebted Poor Countries (HIPC) Completion Point. Contingent on the full delivery of the HIPC Initiative, MDRI, and beyond-HIPC assistance at the Completion Point (an alternative scenario under the DSA analysis), Somalia’s debt indicators would still be consistent with a manageable debt situation following Completion Point. As such, in a forward-looking sense, Somalia’s debt is assessed as sustainable.

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Somalia - Joint World Bank-IMF Debt Sustainability Analysis (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/399761608603357966/Somalia-Joint-World-Bank-IMF-Debt-Sustainability-Analysis