Debt relief and the political marketplace in Somalia

This memo provides an analysis of the implications of prospective debt relief for the dynamics of the political marketplace in Somalia. While there is clearly great moral value in writing off Somalia’s debt and opening the possibility for new development funding, which is in line with recent global trends and emphasised more so given the Covid-19 pandemic, this memo questions the dominance of short-term political calculus over ensuring systems of accountability and transparency. The contradictions of international demands, benchmarks and statements with the reality of those achievements is highlighted below and suggests that international political drivers are problematic and instrumentalised domestically. The memo further suggests that there are high risks in countries such as Somalia that key financial institutions become drawn into the political marketplace making short-term transactional decisions at the expense of long-term institution-building. The study findings were based on 34 interviews conducted between March and August 2020, out of which 26 were carried out remotely and 8 in Mogadishu. The key informants included long-term Somalia analysts and observers, Government and ex-Government officials, Mogadishu-based academics, civil society and businesspeople, ex-World Bank staff, donor and former donor staff members. In addition, the study carried out an extensive literature and media survey, including open sources such as the IMF and World Bank documents available online, as well as other grey literature.