How Somalis See Debt Relief: What a 2025 Post-HIPC Survey Reveals

A digest of Sheikh Ali & Jama (2025), International Journal of Economics and Financial Issues

In December 2023 Somalia reached the Completion Point of the Heavily Indebted Poor Countries (HIPC) Initiative, securing about US$4.5 billion in debt relief and cutting external debt from over 64% of GDP in 2018 to under 6%. International institutions hailed a milestone, but how ordinary Somalis understand debt relief — and what they now expect for prices, jobs, production and investment — has received little attention. This 2025 study surveys 500 people across Somalia's federal member states and Banadir, drawing on expectation theory, fiscal illusion theory and public choice theory. It is relevant to policymakers, economists and anyone working on fiscal communication and public trust after debt relief.

HIPC debt relief in December 2023 was worth about US$4.5 billion. The survey reached 500 online respondents across 7 regions, and 45.4% of them expect investment inflows to fall. Awareness and economic optimism are almost perfectly correlated (r = .98).

Article at a Glance

The article is "Understanding Post-HIPC Public Sentiment: An Empirical Study of Economic Expectations and Fiscal Perception in Somalia," by Ali Yassin Sheikh Ali (SIMAD University) and Ahmed Khadar Abdi Jama (University of Somalia). It was published in the International Journal of Economics and Financial Issues, Vol. 15, No. 5, pp. 416–428 (EconJournals; open access, CC BY 4.0), in 2025 (received 13 June 2025). Its research area is public finance, sovereign debt and economic expectations, and its study context is Somalia after HIPC Completion: Banadir, Puntland, Somaliland, Jubaland, Galmudug, South West and Hirshabelle. The method is a cross-sectional online survey (Likert scales) analysed with factor analysis, correlation, multiple regression, moderation analysis, t-tests and ANOVA (SPSS 26). The DOI is https://doi.org/10.32479/ijefi.21518.

The Research Problem

Debt relief creates fiscal space, but it can also bring new taxes and raised expectations that are slow to be met. The authors argue that whether citizens see Somalia's HIPC achievement as progress or as a burden will shape public support for reform, yet evidence on Somali public perceptions of debt relief is lacking. Experiences in Uganda, Zambia, Ghana and Bolivia, which the authors review, suggest that public trust and communication strongly influence what happens after debt relief.

Research Objective

The study examines public perceptions of debt relief and how awareness, trust, information and political narratives relate to expectations for inflation, employment, domestic production and investment. Its hypotheses include the following. H1–H2 hold that awareness, misconceptions and risk perception, and the remaining perception measures, predict economic optimism. H3 holds that trust in government moderates the link between awareness and optimism. H4 holds that perceptions differ by age, gender, education, field of study, employment and region.

How the Study Was Conducted

A cross-sectional survey of 500 adults, allocated across seven regions and recruited through digital platforms and local contacts, with an online questionnaire in Somali and English piloted on 30 people. Eight constructs were each measured with three Likert items: debt relief awareness, information-based expectation formation, economic optimism, misconceptions about borrowing, overestimation of debt relief, debt-risk perception, trust in government, and political-narrative influence.

The analysis followed six steps. In step 01, Sample, respondents were Banadir 24%, Puntland 18% and Somaliland 16%; 70% were male and 57.6% were university educated. In step 02, Factor analysis, KMO was .72–.77, with one factor per construct explaining 74–89% of variance. In step 03, Reliability, Cronbach's alpha was .83–.94 across constructs. In step 04, Correlation and regression, the eight constructs were correlated and optimism was regressed on the other seven. In step 05, Moderation, the interaction of awareness and trust in predicting optimism was tested. In step 06, Group tests, t-tests and ANOVA were run by age, gender, education, employment and region.

Key Findings

The table below was computed by Skilful from Table 3 of the article by combining "slightly" and "significantly" responses (n = 500), and it shows what respondents expect to happen after HIPC. For inflation, 43.6% expect an increase, 19.6% expect it to stay the same and 36.8% expect a decrease. For employment, 42.2% expect an increase, 19.0% stay the same and 38.8% a decrease. For domestic production, 39.8% expect an increase, 21.2% stay the same and 39.0% a decrease. For investment inflows, 35.0% expect an increase, 19.6% stay the same and 45.4% a decrease.

1. Opinion is split, and investment is the gloomiest outlook. Respondents are divided on every indicator, and on whether debt relief succeeded (40.6% successful vs 39.8% unsuccessful).

2. Awareness, misconceptions and optimism move together. Awareness (β = 0.59) and misconceptions about borrowing (β = 0.35) predict optimism; political-narrative influence predicts lower optimism (β = −0.11). Trust has no direct effect (p = .157) but a small positive interaction with awareness (0.01, p = .01).

3. A sharp regional divide. Optimism is highest in Somaliland, Puntland and Jubaland and lowest in Hirshabelle and South West (η² = .38). Older and employed respondents are more optimistic.

Reading note: Awareness, misconceptions and optimism correlate at r = 0.98, so as measured they are nearly indistinguishable; the regression's R² of .97 largely reflects this overlap. The text also reports only the "significantly" responses from Table 3 (e.g., 17.4% expecting more investment). And although the abstract says overestimating debt relief amplifies optimism, its regression coefficient is negative (β = −0.02).

What the Study Contributes

The contribution is primarily empirical and exploratory: an early survey of Somali public perceptions after HIPC Completion, with new scales grounded in three theories and detailed comparisons across regions and demographic groups. The authors recommend transparent tracking of debt-relief savings modelled on Uganda's Virtual Poverty Fund, targeted fiscal-literacy campaigns, depoliticised economic communication, and participatory governance.

Important Limitations

Identified by the authors: The paper does not include a dedicated limitations section.

Skilful cautions arising from the study design: The online sample is highly educated, and every respondent studied economics, business, finance or public administration, so it does not represent Somali households generally. Regional quotas followed accessibility, and Hirshabelle has only 30 respondents. Discriminant validity is not tested; correlations of .98 suggest the scales overlap. Responses in Tables 2–3 are spread almost evenly across categories (about 17–25% each), an unusual pattern worth checking against the raw data. Finally, cross-sectional data show associations, not causes.

Why This Research Matters

Somalia's post-HIPC reforms depend on public cooperation, from tax compliance to support for new borrowing. The study highlights how regional and demographic divides in understanding and trust could shape that cooperation.

Skilful Research Insight

Editorial commentary — not a finding of the study. Three lessons stand out. First, new scales need a discriminant-validity check (such as HTMT) before they enter a regression together; correlations near 1 mean one construct is being measured several ways. Second, report combined response categories in the text, not just the extremes. Third, the questions this study raises deserve a nationally representative follow-up — ideally repeated over time and linked to actual budget and service-delivery data — to see whether trust grows as debt-relief savings become visible.

Read the Original Research

The original article is "Understanding Post-HIPC Public Sentiment: An Empirical Study of Economic Expectations and Fiscal Perception in Somalia," published in the International Journal of Economics and Financial Issues, 15(5), 416–428 (2025), by Ali Yassin Sheikh Ali and Ahmed Khadar Abdi Jama. Its DOI is https://doi.org/10.32479/ijefi.21518, and the publisher/journal page is EconJournals, www.econjournals.com (open access, CC BY 4.0). Skilful summarises; all findings belong to the original authors.

SEO Information

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