Somalia’s debt relief process creates political risks

Significance

The government has made significant progress in enacting critical reforms and legislation to support the management of public finances, but serious questions over their implementation remain and there are fears that the decision point may prove premature.

Impacts

• Amid weak national development planning, infrastructural and sectoral spending may be prioritised over socio-political reform.
• Misinformation and misconceptions about the timeframe and benefits of the process risk destabilising fragile domestic politics.
• Debt relief offers no solution to the high rates of capital flight and illicit financial flows that continue to undermine public finances.