Khartoum — Leading international financial bodies are agreed in Washington that Khartoum has made the required moves entitling the Sudan to enjoy debt relief assistance within what is known as the Heavily Indebted Poor Countries (HIPC) Initiative.
The Executive Boards of the World Bank's International Development Association (IDA) and the International Monetary Fund (IMF) said debt relief will support Sudan in implementing essential reforms to improve the lives of its people by allowing the freeing up of resources to tackle poverty and improve social conditions.
Sudan's external public debt will be irrevocably reduced-through HIPC debt relief and other debt relief initiatives anchored to the HIPC initiative-by more than US$50 billion in net present value terms, representing over 90 percent of Sudan's total external debt-if it reaches the HIPC Completion Point in about three years' time.
"My warmest congratulations to the government and the people of the Sudan on this landmark achievement, freeing the country from the heavy debt burden inherited from the past and gaining access to significant new financial resources from development partners to build the future", said the IMF Managing Director, Kristina Georgeviea.
She said this stage was reached as the various parties work together, including that the country working hard on vital economic reforms and the international community supporting debt relief for Sudan in its largest operation since the adoption of the highly indebted countries initiative.
"We in the IMF have done and will continue to do our part for Sudan's economic revival at par with the aspirations of the Sudanese people; especially the women and the youth of Sudan that led the historic transformation of the country" said Kristlina Georgieva, IMF managing Director.
Meanwhile the World Bank Group President David Malpass has stressed that the date marks an important milestone that will enable Sudan to significantly reduce its debt burden.
"This is a potentially transformative outcome for a nation of 44 million people that has suffered conflict, instability, and economic isolation for decades," he said following the World Bank Executive Board discussion on June 28, 2021.
He said the World Bank has been providing pre-arrears clearance grants to Sudan and supporting the Sudan Family Support Program, and that they are looking forward to further scaling up WB engagement to improve the living conditions of the Sudanese people.
According to a statement released by the IMF on Wednesday, Sudan is committed to strengthening macroeconomic stability; implementing policies to reduce poverty; and putting in place a set of reforms focused on fiscal sustainability, exchange rate flexibility, expanding 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 working together to provide the technical assistance and policy guidance needed by the authorities to achieve these goals, including in the context of the new, 39-month IMF financial arrangement.
In addition, following the arrears clearance, the World Bank has unlocked substantial project financing through IDA, which will provide nearly US$2 billion in grants for poverty reduction and sustainable economic recovery-with a focus on enhancing competitiveness, transparency and accountability; increasing investment in irrigation and agriculture to support sustainable livelihoods; supporting access to energy, water, health, and education; creating jobs; and creating entrepreneurship opportunities for women and youth.
The leaderships of the World Bank Group and the IMF have expressed gratitude to their member countries of all regions and income levels, in particular Canada, France, Italy, Malta, Saudi Arabia, Sweden, Switzerland, the United Kingdom, and the United States, together with the European Commission, whose interventions and additional grants helped catalyze international support and raise the necessary financial resources to help Sudan reach the Decision Point.
They also thanked other countries which went through their budgetary processes to contribute: Austria, Denmark, Germany, the Netherlands, Norway, Portugal, Spain, and Turkey.
Meanwhile the U.S. Department of the Treasury has welcomed the announcement from the International Monetary Fund (IMF) that Sudan has successfully cleared roughly $1.4 billion in arrears to the IMF, a press release by the Department of the Treasury said.
It said the American administration has also commended Sudan's civilian-led transitional government for reaching the first phase of debt relief under the Heavily Indebted Poor Countries (HIPC) initiative.
It said the move was a milestone that stands as a testament to the sustained commitment of Sudanese authorities to implement challenging but necessary economic reforms amidst the country's transition to democratic rule. These reforms include unifying the exchange rate and strengthening governance and transparency.
"This is a historic moment for Sudan and its people," Secretary of the Treasury Janet L. Yellen, was quoted as saying. "The U.S. is proud to have been an early advocate for Sudan to normalize ties to the international financial institutions and helping it to secure debt relief. These steps will unlock much-needed financing and will help build the foundation for poverty reduction, inclusive development, and economic growth. All Sudanese can take pride in this achievement."
The release pointed out that the U.S. has played a critical role in supporting Sudan's path to HIPC debt relief, in recognition of the important work the Government of Sudan has undertaken to restore economic stability. Treasury provided same-day bridge financing of approximately $1.15 billion in March to help Sudan clear its arrears at the World Bank, at no cost to U.S. taxpayers, and co-hosted a roundtable with the Department of State to encourage Sudan's bilateral creditors to advance debt relief efforts.
The release went on to say that Treasury has also committed to contribute up to $120 million in grant resources to fund IMF debt relief for Sudan under the first phase of HIPC announced today.
"The U.S. is pleased to join other Paris Club members in providing both immediate and future debt relief in accordance with the provisions of the HIPC initiative and will continue to support Sudan as it implements additional economic reforms needed to complete the HIPC process", the release stressed.
It is to be noted that the Sudan is the last country to clear protracted arrears to the IMF, which now faces no repayment arrears from its members for the first time since early 1975.
The European Union has on the other hand welcomed the announcement that Sudan has successfully reached the Decision Point under the Heavily Indebted Poor Countries (HIPC) Initiative.