Somalia's government on Wednesday held celebrations in the capital, Mogadishu, after the IMF and the World Bank announced $4.5bn ($3.5bn) in debt relief for the country.

Prime Minister Hamza Abdi Barre says that the relief is "equivalent to relieving every Somali person of a debt of more than $300".

"This is a testament that our country and our people are financially viable, attracting foreign investment, and we are no longer debt-ridden,” he adds.

The organisations pardoned Somalia's debt under the Heavily Indebted Poor Countries (HIPC) programme, which was created in 1996 to help poor countries facing an unmanageable debt burden.

The $4.5bn debt relief also includes pardons by other multilateral, bilateral and commercial creditors.

"Somalia’s external debt has fallen from 64% of GDP in 2018 to less than 6 per cent of GDP by the end 2023," the institutions said in a joint statement.

PM Barre says the relief is monumental as it will allow Somalia to invest in development programs, revitalise the economy and borrow money from international lending institutions.