Mogadishu, December 13, 2023 – The Federation of Somali Trade Unions (FESTU) is celebrating a historic day as Somalia marks a significant achievement by successfully reaching the completion point of debt relief under the World Bank and International Monetary Fund’s (IMF) Heavily Indebted Poor Countries (HIPC) Initiative.
This accomplishment signifies the beginning of a new era in Somalia’s pursuit of economic stability and growth. FESTU extends its heartfelt congratulations to President Hassan Sheikh Mohamud and his government, commending their efforts not only in initiating the debt relief process but also in overcoming various challenges to achieve this breakthrough whose positive implications are far-reaching, especially for the working people, who make up the majority of Somalia’s population.
Debt relief represents a ray of hope for Somalia’s economic future, offering an opportunity to shed the weight of debt that has hindered the nation’s progress for too long. The reduction in the debt burden is expected to directly contribute to greater economic stability, fostering an environment conducive to job creation and improved living conditions for workers and their families.
For Somali workers, debt relief means more jobs, fair pay and improved working conditions. With less debt to worry about, the government can now invest more in important areas like education, healthcare and infrastructure. This will make life better for all Somalis, especially the people who work hard to keep our economy going.
It is essential to recognize that debt relief carries a shared responsibility. The government must diligently work to enhance domestic revenue mobilization for financing development priorities while safeguarding against potential future debt distress. Responsible financial management, coupled with transparency and rigorous oversight of spending and investments, will be critical in maintaining the progress achieved through debt relief.
FESTU General Secretary, Omar Faruk Osman, emphasized the urgency of continuous and substantial support from international financial institutions (IFIs) in the form of grants rather than loans. He stated, “Now that Somalia has reached the HIPC completion point and considering the nation’s pressing needs, it is crucial for the country to receive significant and ongoing support from IFIs. These grants will enable Somalia to fund essential programs aimed at improving the lives of our less fortunate citizens and strengthening the economic well-being of the Somali people. Trade unions firmly believe that expecting Somalia to take on new debt would be unwise, potentially leading us back into the financial difficulties we have just overcome.”
“As we move forward, it is imperative that we remain vigilant to ensure the equitable distribution of the benefits of debt relief among Somali citizens. Additionally, we wholeheartedly endorse the international demands of trade unions for an improved system of debt resolution for countries in Africa and other regions grappling with debt crises,” asserted FESTU General Secretary.
The journey to secure debt relief was a lengthy one for Somalia and as such, FESTU stands ready to collaborate with the federal government, federal member states, international partners and civil society to monitor the implementation of debt relief initiatives, advocate for the rights and interests of workers and actively contribute to Somalia’s sustainable development.