The World Bank and the US Treasury said today, Friday, that Sudan has settled its debt with the World Bank after nearly three decades, which brings the heavily indebted African country closer to an international package of debt relief that it badly needs.
World Bank President David Malpass said the move means Sudan can now access $ 2 billion in grants from the International Development Association (IDA).
Sudan’s repayment of the arrears was made possible through a temporary loan of $ 1.15 billion provided by the US government.
Sudanese Finance Minister Gabriel Ibrahim said that settling the arrears allows the country to secure financing from the World Bank Group and other multilateral institutions and to proceed with transformative development projects.
“We are grateful to the US government for facilitating the settlement process, which also supports our endeavor towards a more comprehensive debt forgiveness,” Ibrahim added.
US Treasury Secretary Janet Yellen said Sudan deserves to be commended for implementing what she described as a “strong economic program” that supports the country’s transition to democracy after three decades of international isolation.
“The United States is pleased to support these efforts today by helping Sudan settle its arrears to the World Bank … It is a move that will take Sudan a step closer to obtaining much-needed debt relief and help the country reintegrate into the international financial community,” she added in a statement.
A civilian-led transitional government took power in Sudan in April 2019 after Omar al-Bashir was ousted, ending years of international isolation.
Sudan is seeking relief from foreign debts worth about $ 56 billion owed to international financial institutions, official bilateral creditors and trade creditors. About 85 percent of that debt is in arrears.
The IMF said this month that Sudan had made progress in a program monitored by IMF experts, but that its economy remained “extremely fragile” with inflation reaching 300 percent and a shortage of basic goods.
A source familiar with the process confirmed that the latest move means that Sudan may reach what it calls the ‘decision point’ for the first phase of a broader debt relief package under the Heavily Indebted Poor Countries Initiative (HIPC) as early as mid-2021.
The US loan announced on Friday was being worked on for months after the United States removed Sudan from its list of state sponsors of terrorism in late December.
Sudan met one of the basic conditions demanded by international donors in February, when it took steps to unify the official exchange rate and the parallel market.
“They carried out an unprecedented level of reform in a very short period … We hope that they will be able to continue making progress in the coming weeks and months,” the source said.
The source added that helping Sudan settle its arrears with the World Bank would contribute to showing the Sudanese people that painful reforms such as ending fuel subsidies are bearing fruit.
According to a source familiar with the matter, Sudan’s total debt includes about $ 2.87 billion owed to the World Bank, the International Monetary Fund and the African Development Bank, $ 19 billion owed to countries in the Paris Club of official bilateral lenders, $ 21 billion to non-members of the Paris Club, and the rest to creditors. Commercial.
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