Sudan Eligible for Debt Relief Assistance under the HIPC Initiative
(MENAFN – Sudanow Magazine) KHARTOUM (Sudan) – The main international financial bodies agreed in Washington that Khartoum has taken the necessary steps to allow Sudan to benefit from debt relief aid as part of what this is called the Heavily Indebted Poor Countries (HIPC) Initiative.
The Boards of Directors of the World Bank’s International Development Association (IDA) and the International Monetary Fund (IMF) say debt relief will help Sudan implement reforms essential to improve lives of its population by freeing up resources to fight poverty and improve social conditions.
Sudan’s external public debt will be irrevocably reduced – through HIPC debt relief and other debt relief initiatives anchored in the HIPC Initiative – by over US $ 50 billion in present value terms. net, which is over 90% of Sudan’s total external debt – if it reaches the HIPC Completion Point in about three years.
“My warmest congratulations to the Sudanese government and people for this historic achievement, freeing the country from the heavy burden of debt inherited from the past and accessing significant new financial resources from development partners to build the future,” the IMF said. Managing Director, Kristina Georgeviea.
She said that this milestone has been reached as different parties work together, including as the country works hard on vital economic reforms and the international community supports Sudan’s debt relief in its largest operation since Iran. adoption of the highly indebted countries initiative.
“At the IMF, we have done and will continue to do our part for the economic recovery of Sudan on par with the aspirations of the Sudanese people; especially the women and youth of Sudan who have led the country’s historic transformation, ”said Kristlina Georgieva, Managing Director of the IMF.
Meanwhile, World Bank Group President David Malpass said the date marks an important milestone that will allow Sudan to significantly reduce its debt burden.
“This is a potentially transformative outcome for a nation of 44 million people which has suffered from conflict, instability and economic isolation for decades,” he said following the discussion. of the Board of Directors of the World Bank on June 28, 2021.
He said the World Bank has provided arrears clearance grants to Sudan and supported Sudan’s Family Support Program, and looks forward to further scaling up the World Bank’s engagement to improve conditions. life of the Sudanese people.
According to a statement released on Wednesday by the IMF, Sudan has pledged to strengthen macroeconomic stability; implement poverty reduction policies; and put in place a set of reforms focused on fiscal sustainability, exchange rate flexibility, broadening the social safety net, strengthening the financial sector and improving governance and transparency, in order to reach the HIPC completion point.
The World Bank and the IMF will continue to work together to provide the technical assistance and policy guidance the authorities need to achieve these goals, including in the context of the IMF’s new 39-month financial arrangement.
In addition, following arrears clearance, the World Bank has released substantial project finance through IDA, which will provide nearly US $ 2 billion in grants for poverty reduction and recovery. sustainable economy, with a focus on improving competitiveness, transparency and accountability; increase investments in irrigation and agriculture to support sustainable livelihoods; support access to energy, water, health and education; job creation; and create entrepreneurial opportunities for women and young people.
World Bank Group and IMF leaders expressed gratitude to their member countries from all regions and income levels, especially Canada, France, Italy, Malta, Saudi Arabia, Sweden, Switzerland, the United Kingdom and the United States, in collaboration with the European Commission, whose interventions and additional grants have helped catalyze international support and mobilize the financial resources necessary to help Sudan reach the point of decision.
They also thanked the other countries that followed their budget processes to contribute: Austria, Denmark, Germany, the Netherlands, Norway, Portugal, Spain and Turkey.
Meanwhile, the US Treasury Department welcomed the announcement by the International Monetary Fund (IMF) that Sudan has successfully settled about $ 1.4 billion in arrears to the IMF, according to a press release from the department. of the Treasury.
He said the US administration also commended the civilian-led Sudanese transitional government for achieving the first phase of debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative.
He said the move was an important step that testifies to the sustained commitment of the Sudanese authorities to implement difficult but necessary economic reforms as part of the country’s transition to democratic rule. These reforms include the unification of the exchange rate and the strengthening of governance and transparency.
“This is a historic moment for Sudan and its people,” Treasury Secretary Janet L. Yellen said. “The United States is proud to have been one of the first supporters of Sudan to normalize its ties with international financial institutions and help secure debt relief. These measures will unlock much-needed funding and help lay the foundations for poverty reduction, inclusive development and economic growth All Sudanese can be proud of this achievement.
The statement stressed that the United States has played a critical role in supporting Sudan on the path to HIPC debt relief, in recognition of the important work that the government of Sudan has undertaken to restore economic stability. The Treasury provided same-day bridging funding of about $ 1.15 billion in March to help Sudan clear its arrears to the World Bank at no cost to U.S. taxpayers, and co-hosted a roundtable with the State Department to encourage Sudan’s bilateral creditors to advance the debt. relief efforts.
The statement added that the Treasury has also pledged to contribute up to $ 120 million in grants to finance IMF debt relief in Sudan under the first phase of the HIPC Initiative announced today. hui.
“The United States is pleased to join other Paris Club members in providing immediate and future debt relief in accordance with the provisions of the HIPC Initiative and will continue to support Sudan in the implementation of further economic reforms. necessary to complete the HIPC process, ”the statement said. stress.
It should be noted that Sudan is the latest country to clear protracted arrears to the IMF, which is now not facing any arrears in repayments from its members for the first time since early 1975.
The European Union also welcomed the announcement that Sudan has successfully reached the decision point under the Heavily Indebted Poor Countries (HIPC) Initiative.
MO / AS
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