The French government on Monday offered to grant a $1.5 billion bridge loan to clear Sudan’s arrears to the International Monetary Fund (IMF), reported Reuters.
During an international summit in Paris on Monday, France’s President Emmanuel Macron said his government has also decided to cancel almost $5 billion in debt owed by Sudan to Paris. The loan waiving is part of efforts to help Sudan in its transition to democracy after the ousting of Omar al-Bashir.
“We (France) are in favor of an outright cancellation of our debt to Sudan” which amounts to “nearly $5 billion”, Macron said adding that the African country needed to be rid of its debt burden in order to move forward.
Sudan is currently trying to emerge from decades of economic sanctions and isolation under ousted former President Al-Bashir. The military ousted the long-serving leader in April 2019 following an uprising.
Sudan had built up huge arrears on its debt, but the country has made rapid progress toward getting it forgiven under the IMF and World Bank’s Highly Indebted Poor Countries (HIPC) scheme. The HIPC scheme would reopen access to badly needed cheap international financing.
Sudanese Prime Minister Abdallah Hamdok came to power as the head of a transitional government shortly after the ousting of Bashir whose three-decade rule was marred by economic hardship, deep internal conflicts, and biting international sanctions.
In the last two years, Hamdok and his government have pushed to rebuild the country’s crippled economy with inflation at over 300% and shortages of basic goods and end its international isolation.
Sudan cleared its arrears with the World Bank and the African Development Bank recently with the help of bridge loans from Western states. But, the country needs to clear its arrears to the IMF as well in order to move forward to a “decision point” that would unlock the HIPC process in June.
