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Somalia secures $4.5bn debt relief from lenders

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After a decade-long process of negotiations and reforms with creditors, Somalia has finally secured a $4.5 billion debt write-off from global lenders as the enhanced Heavily Indebted Poor Countries (HIPC) Initiative has spared the nation from repaying its debt.

 

The World Bank reports that the country’s debt has significantly decreased from a peak of $5.2 billion to $600 million as a result of the action taken by multilateral and bilateral lenders, including the International Monetary Fund (IMF).

Commercial creditors have contributed $3 billion towards the debt relief, with multilateral creditors contributing $573.1 million, the World Bank’s International Development Association contributing $448.5 million, the IMF contributing $343.2 million, and the African Development Fund contributing $131 million.

Following the Bretton Woods institutions’y boards’ approval process, a historic announcement regarding Somalia’s debt forgiveness is scheduled to take place in Washington DC on December 13.

HIPC completion points were reached by 37 nations, with Somalia following suit after Zimbabwe and Sudan were left behind. Under the leadership of the current president, Hassan Sheikh Mohamud, Somalia began holding HIPC talks ten years ago, and the nation has continued on the reform path despite political obstacles.

Kristina Svensson, the country manager for Somalia at the World Bank, praised Mogadishu for its “remarkable” commitment to reform last week.

“There have been a lot of political challenges within Somalia, but this thing (principles of HIPC), has held it quite high,” she said.

“This is satisfactory for them (Somalia) to achieve debt relief,” said Ms. Svensson. “Both the World Bank and IMF as well as other international partners, have been essential to providing technical assistance to support the achievement of these triggers.”

Over the past few weeks, Somalia has achieved huge milestones in its efforts towards socioeconomic and political liberation. It recently joined regional bloc, East Africa Community (EAC), as it seeks strategic partnerships with neighbours.

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Nigerian centra bank’s N1trn OMO bills oversubscribed

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The Central Bank of Nigeria (CBN) has issued N1.053 trillion (680 million dollars) in short-term instruments in the recently concluded sale of government securities.

The sale is a component of CBN’s liquidity management exercise, according to a statement released on Sunday night by Mrs. Hakama Sidi, Acting Director of the Corporate Communications Department.

The apex bank’s N500 billion offer at the Open Market Operations (OMO) auction was oversubscribed, according to Sidi. Foreign investors accounted for 79% of all bids, or 530 million dollars. The auction was the first since last week’s Monetary Policy Committee (MPC) meeting, which was followed by a virtual meeting with international portfolio investors.

Sidi claims that Olayemi Cardoso, the governor of the CBN, utilised the two sessions to establish a comprehensive plan aimed at reducing inflation, stabilising the currency rate, and boosting trust in the banking sector and the overall economy.

The apex bank now enjoys a high degree of confidence from investors, she added, and the management of the CBN was hopeful that its monetary policy initiatives were starting to have a good impact.

Cardoso, in the meantime, emphasised in the investor meeting the prospects for a steady rise in the CBN’s foreign exchange reserves. He gave them assurances about increased market liquidity and the quick resolution of the outstanding backlog of legitimate FX transactions.

“The CBN is committed to supporting price stability by taking the necessary measures to increase liquidity in the foreign exchange markets sustainably.

“Our focus is on building a fully functioning market that allows smooth entry and exit for investors,” he said.

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Partners ‘willing to walk away,’ US warns Tanzania over gas project delays

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Tanzania’s much-awaited, multimillion-dollar liquefied natural gas project is facing impending investor withdrawals from the United States, if delays caused by negotiating technicalities persist, the country has warned.

 

Companies like Exxon Mobil, who have been pushing the deal with Tanzanian authorities, have reached a point where they are now “willing to walk away,” US Deputy Assistant Secretary of State Joy Basu told journalists.

 

Basu, whose portfolio in the Joe Biden administration includes overseeing economic and regional affairs in Sub-Saharan Africa cautioned that “there is LNG in lots of places around the world now, and for Tanzania the window for this particular investment is closing fast. Such windows do not remain open forever.”

 

In meetings with Tanzanian government officials during the week to monitor the development of a US-Tanzania commercial dialogue that was initiated in October of last year, she stated that the project’s status was a top priority.

 

One of many international companies involved in the LNG project in southern Tanzania is Exxon Mobil, headquartered in Houston, Texas. The project’s estimated cost increased from $30 billion in 2014 to $42 billion by the previous year.

 

The project’s other partners include the state-owned Tanzania Petroleum Development Corporation, Exxon Mobil, Pavilion Energy (Singapore), Medco Energi (Indonesia), and Britain’s Shell and Norway’s Equinor, which have been designated as joint main operators.

 

She said that the project’s status was a major priority during meetings with Tanzanian government representatives this week to track the progress of a US-Tanzania commercial dialogue that was started in October of last year.

 

In order to expedite the development of its natural resources, the government intends to work with China’s Cnooc Ltd. to jointly explore for oil and gas in two offshore blocks that are owned by Tanzania Petroleum Development Corp., a state-owned company.

 

Since a downturn in 2020 when it 57.1 billion cubic feet of natural gas, a decline from 63.8 billion cubic feet the year before, the continent’s search for hydrocarbons has increased gradually as European countries look to diversify their energy sources and reduce their reliance on Russian gas.

 

Apart from the established main gas producing countries like Nigeria, Algeria, and Egypt, other African nations like Tanzania have been rising as potential players in the natural gas industry.

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