The World Bank and the United States Treasury Department on Friday said the grant would allow the heavily indebted African country access to a much-needed international debt-relief package.
World Bank President David Malpass said the move meant Sudan could now access nearly $2bn in grants from the Bank’s International Development Association (IDA). The Sudanese government said $635m would be immediately available for budget support and welfare spending.
Sudan’s Finance Minister Jibril Ibrahim said clearance of the arrears would enable the country to secure financing from the World Bank Group and other multilateral institutions and move forward with transformative development projects.
“We are thankful to the US government for facilitating this clearance process, which also supports our drive towards more comprehensive debt relief,” Ibrahim said.
US Treasury Secretary Janet Yellen said Sudan deserved credit for implementing what she called a “robust economic reform programme” that underpins the country’s transition to democratic rule after three decades of international isolation.
“The United States is pleased to support these efforts today by helping Sudan clear its arrears to the World Bank,” she said in a statement. “It’s an action that will move Sudan one step closer to securing much-needed debt relief and help the nation reintegrate into the international financial community.”
Sudan is seeking relief from some $56bn in external debt owed to international financial institutions, official bilateral creditors and commercial creditors with about 85 percent of that in arrears.
A source familiar with the matter said Sudan’s overall debt includes about $2.8bn owed to the World Bank, International Monetary Fund (IMF) and African Development Bank; $19bn owed to countries in the Paris Club of official bilateral creditors; $21bn to non-Paris Club members; and the rest to commercial creditors.
Sudan fulfilled one of the main conditions demanded by international donors for debt relief in February when it took steps to unify its official and black-market exchange rates which brings the country closer to the first phase of a broader debt relief package under the Heavily Indebted Poor Countries (HIPC) initiative as early as mid-2021