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Norway to provide bridging loan to Somalia
Press release | Date: 10/10/2019

The Government has proposed that Norway should provide a short-term bridging loan of NOK 3.135 billion to Somalia in 2020 to clear Somalia’s debt arrears to the World Bank’s International Development Association. Technically, this is a loan to Somalia, but the funds will be transferred to a World Bank account. The World Bank will then grant Somalia a new loan, which will be used immediately to repay the bridging loan from Norway.

‘Following several decades of civil war, the situation in Somalia has stabilised in the last few years. The authorities have implemented a number of important political and economic reforms, but the country is still in a vulnerable situation. This loan from Norway will be an important contribution to the work to promote reform and stabilisation in Somalia,’ said Minister of Foreign Affairs Ine Eriksen Søreide.

Somalia’s external debt amounts to approximately USD 4.7 billion, and debt cancellation is a key priority for the Somali Government. A third of the debt is owed to the multilateral development banks, the World Bank and the African Development Bank, and the International Monetary Fund (IMF). These debt arrears need to be cleared before Somalia can receive new loans and debt relief. In addition to the bridging loan from Norway, the UK will provide a bridging loan to cover Somalia’s debt to the African Development Bank. This means that Somalia just needs one more donor country to cover its debt to the IMF. When these three loans are in place, Somalia will qualify for debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative, provided that it implements the ongoing programme of economic reforms agreed with the IMF.

‘Somalia’s debt arrears to Norway amount to NOK 16 million. If Somalia receives debt treatment in the Paris Club under the HIPC initiative, this debt will be cancelled,’ said Minister of International Development Dag-Inge Ulstein.

Mr Ulstein will participate in a roundtable meeting on Somalia during the World Bank’s Annual Meetings in Washington next week.

‘Debt relief is essential if Somalia is to continue its stabilisation and reform efforts. This bridging loan operation shows what we can achieve when donors and multilateral financial institutions work together. This will be a topic of discussion at a number of the meetings I’ll be having during the World Bank’s Annual Meetings next week. The aim is to carry out this bridging loan operation during the first quarter of 2020,’ Mr Ulstein said.

Somalia is an important partner country for Norway, and it received NOK 543 million in bilateral aid from Norway last year. Together with the EU, the UK and Germany, Norway has invested substantial resources in promoting institution-building, good governance and stabilisation in the country. Norway has contributed to efforts to promote peace and stabilisation in Somalia since the early 2000s.

Ministry of Foreign Affairs
TOPIC
Development cooperation

Norway has helped clear all the arrears to the Paris Club. This is to the tune of 350 million dollars.

This means Somalia is now able to get billions of dollars of loans from World Bank and IMF. This will help accelerate the rebuilding of the country.

Seems like a slight of hand.....a conjuring trick.
Norway pays off the loan to the World Bank....Somalia then takes out a new loan which is used to pay off Norway.......End result Somalia is still in debt to the World Bank.

[quote="original dervish" post_id=4955975 time=1570711734 user_id=113729]
Seems like a slight of hand.....a conjuring trick.
Norway pays off the loan to the World Bank....Somalia then takes out a new loan which is used to pay off Norway.......End result Somalia is still in debt to the World Bank.
[/quote]

Technically, but that debt will be cancelled shortly after.

With the arrears cleared, Somalia will be eligible to get a new loan. And once the old debt is cancelled, then it will be able to get bigger loan.

Sxb......haven't you learned anything over the last 30 years of IMF/World bank.

Development based on debt has never worked anywhere in the developing world.

All it will do is provide control of the Somali economy over to foreign powers.

They will demand that every resource is privatized, public spending on infrastructure/education/health etc must be cut. Foreign companies will not be taxed and profits can be repatriated......and many more negative policies.

We should follow the Eritrean model of no loans and no ngos.......with the result being that Eritrea is the ONLY African country that will meet the Jubilee goals....of reducing poverty, providing schools/healthcare etc.

Norway is and has always been after Somalia's oil. My guess is this is just part of their agenda to control Somalia's oil resources.

Yep they would have just paid it of if it was benevolence. They want to hold Somalia’s debt to leverage business dealings. They must have really good information on the oil prospects.

A few years ago Norway was actively lobbying the UN to declare Somali territorial waters 12 nautical miles.

They had been working offshore in the Kenya/Somalia disputed zone and had discovered huge oil/gas reserves.

They knew Kenya had no claim that would stand up in court so they began the 12 nautical miles bullshit.

Anyway.....long story short they know have Kheryre as their man and haved dropped Kenya like a ton of shit.

Norway is playing chess while we're playing checkers.

Nothing is for free. Norway isn't benevolent.

[quote="original dervish" post_id=4955977 time=1570712406 user_id=113729]
Sxb......haven't you learned anything over the last 30 years of IMF/World bank.

Development based on debt has never worked anywhere in the developing world.

All it will do is provide control of the Somali economy over to foreign powers.

They will demand that every resource is privatized, public spending on infrastructure/education/health etc must be cut. Foreign companies will not be taxed and profits can be repatriated......and many more negative policies.

We should follow the Eritrean model of no loans and no ngos.......with the result being that Eritrea is the ONLY African country that will meet the Jubilee goals....of reducing poverty, providing schools/healthcare etc.
[/quote]

This is not about development, this is about stablisation and security. If the government has the money to purchase military hardware including Fighter Jets (there are 20 pilots that have graduated from Turkey including my own cousin as a fighter jet pilot). This will tip the balance in favoure for the government.