Sudan granted over $50 billion in debt reduction

On Tuesday, Sudan become the recipient of the IMF and the World Bank’s largest ever debt reduction throughout their formation

Khartoum: AlTaghyeer

Tuesday saw the official announcement of Sudan being granted debt reduction worth more than 50 billion USD within the framework of the HIPC (Helping Indebted Poor Countries) initiative.

A joint statement issued by the World Bank and the International Monetary Fund said that the two institutions decided to forgive $23 billion of Sudan’s debt, and this will be complemented by other debt relief initiatives based on the HIPC, making the total debt relief equal more than “50” billion dollars.

In terms of net present value, the aforementioned total sum represents more than “90%” of Sudan’s total external debt.

Biggest Reduction

The joint statement on Sudan from David Malpass and Kristalina Georgieva on behalf of the Bank and the IMF said that this is the largest debt reduction that a single country has obtained throughout  the history of the two institutions.

The statement considered that this is a historic achievement for Sudan, which represents another important step in its re-engagement with the international community.

“Today, Sudan has reached the decision point for HIPC, thus becoming the 38th country eligible for debt relief under the initiative, jointly launched by the World Bank and the International Monetary Fund in 1996 to ensure that no poor country faces an unimaginable and unmanageable debt burden,” the statement said.

It also explained that this is by far the largest operation of its kind within the initiative’s framework, with a total debt relief of “23.3” billion dollars in current value, which is three times more than the next largest case in the HIPC initiative, and represents about “36 percent of the total cumulative debt relief for Heavily Indebted Poor Countries granted to 37 countries that have previously benefited from the initiative.”

Historical Day

The statement said that this historic achievement puts Sudan on the path to liberating the country from the heavy debt burdens inherited from the past.

“After Sudan completed the unification of the exchange rate, Sudan settled its arrears to the International Development Association (IDA) in March, enabling it to re-engage fully with the World Bank Group after nearly three decades,” it added.

“This paved the way for nearly $2 billion in new grants from the International Development Association, including through enhanced IDA support in recognition of its remarkable transformation and sustainable reform efforts,” the statement continued.

“Today is also a historic day for the International Monetary Fund, as the arrears owed to the International Monetary Fund have now been settled, and as of today, for the first time since 1974, there are no countries with long-term arrears to the International Monetary Fund.”

The statement congratulated the government and people of Sudan for their commendable hard work and progress towards this remarkable achievement.

It thanked all donors and partners who contributed to this effort, including those who provided much-needed support to protect the most vulnerable groups, through the $820 million Family Support Program in Sudan, which is funded jointly with the advance clearing grants for arrears provided by the International Development Association and donor support.

The joint statement emphasized continuing to provide support for the economic recovery and poverty reduction strategy in Sudan in the coming years, and called on the international community to continue supporting Sudan in maintaining this momentum.

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