IMF to grant $ 1.4 billion debt relief to Sudan following member countries’ pledges
The International Monetary Fund will provide comprehensive debt relief to Sudan as member countries of the fund have pledged to support the African country with funding worth $ 1.4 billion.
The new financing from 101 member countries will help Sudan clear its arrears to the IMF and seek additional assistance from the fund, the Washington-based lender said Tuesday.
“Today’s financing stage represents a historic opportunity for Sudan to move towards comprehensive debt relief from the IMF and the international community,” said Kristalina Georgieva, Managing Director of the IMF. “The Fund will continue to help Sudan recover from a long period of instability and economic hardship.
Earlier this month, Sudanese Finance Minister Gibril Ibrahim told Bloomberg that the country aims to write off a “substantial portion” of its $ 60 billion foreign debt by the end of July. The country’s arrears clearance with the IMF by July 1 will pave the way for debt relief ahead of a meeting of the Paris Club, an informal group of 22 government creditors, two weeks later, Ibrahim told the press agency.
A number of countries have recently pledged financial support to Sudan, including France and Saudi Arabia, as the African country faces tough economic challenges as a result of the coronavirus pandemic as well as mismanagement economy under the previous government led by Omar Al Bashir.
Ms. Georgieva said Sudan is now one step closer to reaching the Heavily Indebted Poor Countries (HIPC) decision point, “a milestone that will significantly reduce Sudan’s total debt and allow access to new funds and new investments essential to stimulate growth and fight poverty “.
The HIPC Initiative was launched in 1996 by the IMF and the World Bank, with the aim of ensuring that no poor country is faced with debt it cannot manage. Since then, the international financial community, including multilateral organizations and governments, have worked together to reduce the external debt burden of the most heavily indebted poor countries to sustainable levels.
“I would like to recognize the efforts of our member countries, including many low income economies, in raising funds for Sudan, as well as the continued cooperation of the World Bank, African Development Bank, Paris Club , the European Commission and other development partners who have played a key role in the success of this multilateral initiative, ”said Georgieva.
Sudan is undertaking a number of reforms, including removing fuel subsidies and broadening its tax base to stabilize its economy and support growth. Earlier this year, it devalued its currency among other measures to attract investment and boost exports.
Last year, the United States removed Sudan from its list of terrorist sponsor states, paving the way for the country to secure financial assistance from the World Bank and the IMF.