The recent decision issued by the Word Bank, according to which Sudan is considered eligible for assistance and the enhanced Heavily Indebted Poor Countries (HIPC) Initiative, besides its access US$2bn in World bank grants, is considered an important step towards writing off of Sudan’s total external debt estimated at US$60billion.
This will open the door wide for Sudan to start development and reconstruction through its engagement in the international community.
The IMF and the World Bank have issued a joint statement which considers Sudan eligible for assistance under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative.
The Executive Boards commended the authorities’ sustained commitment to economic and institutional reforms under challenging circumstances and agreed that Sudan could be eligible for assistance under the HIPC Initiative based on preliminary assessment.
This assessment is an important step towards forgiveness by all creditors of most of Sudan’s total external debt.
This decision marks a historic moments as it provides a clear acknowledgement of Sudan’s sustained implementing of key economic and financial reforms under its staff-monitored programme with the IMF.
According to the IMF Executive Board, helping Sudan achieve debt relief and unlock access to the needed resources to increase growth and reduce poverty is a key priority for the IMF to continue cooperation with the Sudanese government in supporting the endeavor.
It is a breakthrough at a time when Sudan needs the world’s help to support its development progress. It will put Sudan on the path to substantial debt relief, economic revival, and inclusive development.
US$1.15bn Bridge Loan
Clearing the arrears was made possible via a US$1.5bn bridge loan from the United States government.
This would enable Sudan to secure financing from the World Bank Group and other multilateral institutions to move forward with transformative development projects.
According to US Treasury Secretary, Sudan deserved credit for implementing a robust economic reform programme that underpins the country’s transition to democratic rule after three decades of international isolation.
The Sudanese government announced that it got direct funding from the World Bank, amounting to US$635 million, following its settlement of its arrears through the US bridge loan.
The US Administration affirmed that it has provided Sudan with more than US$1bn to enable it to settle its arrears to the World Bank. Thus, America has welcomed the reforms led by the Sudanese government.
The US also approved a funding agreement following the visit of its Treasury Secretary last January.
The Treasury Secretary provided Sudan withUS$1.15bn as loan to cover the short-term urgent requirements.
For her part, US Treasury Secretary, Janet Yellen, said Sudan deserves a robust economic reform programme that underpins the country’s transition to democratic rule after three decades of international isolation, adding that the funding will make Sudan closer to easing the burdens of foreign debts which the country is in bad need of doing in order to engage in the international financial community.
Kick-off Removing the Foreign Debts Burdens
Prime Minister Dr. Abdallah Hamadok confirmed that the agreement by the IMF and the world Bank Executive Boards that makes Sudan eligible for debt relief under the HIPC is an important and welcome step towards resuming support from international financing institutions.
It is a clear recognition from the international community of Sudan’s remarkable progress on economic reforms that pave the way to sustainable poverty reduction and economic growth.
Hamadok added that the step crowned a difficult path that led to real victory, including lifting Sudan from the SST list, and the unification of exchange rate on the way for laying the foundation of a developmental economy for the benefit of all Sudanese.
The national project, which the government is working on, is based on stability, economic prosperity, and political consensus.
Former Minister of Finance and Economic Planning, Dr. Ibrahim Al-Badawi, congratulated the Sudanese people on the World Bank writing off the country’s arrears following Sudan’s commitment in implementing the economic reform programme.
He added that, now, we can speak about writing-off Sudan’s debts, thus bringing it out from US$60bn pit, to the horizons of the flow of institutional investments such as Sudan Railways, power plants, international airports.
Finance Minister Comments
Finance Minister Dr. Jibril Ibrahim said that clearance of Sudan’s arrears would enable it to secure financing from the World Bank Group and other multilateral institutions to move forward with transformative development projects.
Sudan has settled its debts with the World Bank after nearly three decades, a matter that qualifies it to be closer to a much-needed international debt-relief package.
The Sudanese government said the US$635 would be immediately available for budget support and welfare spending.
According to Dr. Jibril, the resources provided by the WB and other financial institutions will be directed according to the priorities determined by the government, on top of which is potable water, education and health, before adding that agriculture is our way out.
He affirmed that the government is endeavoring to deal with the arrears through economic reforms, hence providing the required services, calling for more patience considering that overcoming the crisis needs joint efforts.