US Ambassador to Somalia Donald Yamamoto and Somalia's Minister of Finance Abdirahman Dualeh Beileh have signed a bilateral agreement spelling out ways of reducing and restructuring debt owed by the Horn country to three American State agencies.
Having reached the middle stage in its quest for debt cancellation in March this year, Somalia was declared as favoured by its donors for debt relief after implementing important milestones in its economic reform through the Heavily Indebted Poor Countries Initiative (HIPCI).
During the signing of the agreement on Sunday, it was noted that more efforts will lead to Somalia reaching the final stage known as 'Completion Point', by which point the US will have forgiven debts amounting to more than $1 billion (about Sh108 billion).
Amb Yamamoto stated that the US commends Somalia on its efforts towards economic reform.
"Working through the debt relief process will allow Somalia to regain access to financial support from international financial institutions so that it can invest in poverty reduction and economic growth," he said.
"The United States remains a committed partner to Somalia and is pleased to play a role in ensuring the economic success of the people of Somalia."
Mr Beileh stated that since the US is a major member of the Paris Club, this agreement will lead to more accords with other donors to whom Somalia is indebted.
The signing ceremony was attended by Somalia's new Prime Minister Mohamed Hussein Roble who was recently appointed and endorsed by parliament for the key job.