The World Bank logo is seen at the 2023 Spring Meetings of the World Bank Group and the International Monetary Fund in Washington, U.S., April 13, 2023. REUTERS/Elizabeth Frantz/File Photo Acquire Licensing Rights

By Giulia Paravicini and Rachel Savage

Somalia is expected to get major debt relief this week, slashing its debt-to-GDP ratio to less than 6% in a historic move that would allow it to rejoin the international financial system after roughly 30 years.

The war-scarred East African country is set for the relief under the World Bank and International Monetary Fund’s (IMF) Heavily Indebted Poor Countries (HIPC) Initiative.

An IMF media advisory on Monday said Somalia was scheduled to reach the “Completion Point” under HIPC on Dec. 13, calling it “a major milestone in its development path”.

The World Bank’s executive board is expected to approve the Completion Point on Tuesday and the IMF’s board on Wednesday.

After those approvals “Somalia will receive significant debt relief that will reduce its external debt from about 64 percent of GDP at end-2018 to less than 6 percent of GDP at end-2023,” the advisory said.

Earlier this month the United Nations Security Council lifted a three-decade-long arms embargo on Somalia that was put in place to cut the flow of weapons to feuding warlords after a civil war broke out.

The Horn of Africa nation and IMF reached a staff-level agreement in November for a 36-month Extended Credit Facility loan of about $100 million.

In July, Somalia said Russia had granted it relief on $684 million of debt, saying it would play a big role in its debt forgiveness process.

Reporting by Giulia Paravicini and Rachel Savage; Editing by Alexander Winning and Bill Berkrot