Sudan: IMF members reach an agreement to continue Sudan’s debt relief during a conference in Paris

Sudan: IMF members reach an agreement to continue Sudan’s debt relief during a conference in Paris

Sudan is a country located in Northeast Africa, bordering numerous countries. Notably, Egypt, Libya, Chad, the CAR, South Sudan, Eritrea and Ethiopia. It is the third largest country of both the African continent and the Arab League. The country is currently ruled by a Federal provisional military-civilian government, leaded by Abdel Fattah al-Burhan and Prime Minister Abdalla Hamdok. 

Under the previous Presidency of Omar Al-Bashir, the country had faced decades of economics sanctions, isolation and arrears on its debt. This situation was ongoing until 2019, when Sudan’s army detained him, leaving place to the previously mentioned transitional government. The latter, has allegedly been making efforts to pull Sudan out of its long-lasting economic crisis with high levels of inflation, shortages of basic goods and lack of foreign currency reserves.

Under these circumstances, a few days ago France’s president Emmanuel Macron announced in a conference for Sudan in Paris that IMF member countries had agreed to clear Sudan’s debt to the institution, removing a final hurdle to the African nation getting wider relief on the external debt of at least $50 billion. At the same time, Macron also announced that they were planning to continue this debt relief effort with a cancellation of about $5 billion. Other countries such as Kuwait and Saudi Arabia, which are respectively Sudan’s major creditor and one of its major creditors, supported these debt resolution and agreements. 

This whole process aims at continuing the process of forgiving the debt under IMF and World Bank according to their Highly Indebted Poor Countries (HIPC) scheme, which would help the country to gain access again to cheap international financing, which the country is said to be in need of. For this to happen in June, Sudan recently reached an agreement to resolve its debt to both the World Bank and the African Development Bank thanks to bridge loans from Western states.

After these recent agreements, Sudan had to clear its arrears to the IMF, which France confirmed it would facilitate through a $1.5 billion bridge loan, and for that loan to be covered by member state pledges. This will pave the way for HIPC to proceed and boost the prospects of broader economic reform in Sudan, according to Macron.

According to some of the countries that took part in this process of debt cancellation, this is a gest of solidarity that will contribute to Sudan’s transition to democracy, debt relief and support sustainable growth that will enable Sudanese people to build and maintain a lasting democracy.