The Executive Board of the International Monetary Fund (IMF) approved Tuesday a 39-month arrangement under the Extended Credit Facility (ECF) for Sudan in the amount of about $2,472.7 million. The Executive Boards of the World Bank's International Development Association (IDA) and the IMF have determined that Sudan has taken the necessary steps to begin receiving debt relief under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Sudan is the 38th country to reach this milestone, known as the HIPC Decision Point. "The Executive Board's decision will enable an immediate disbursement equivalent to about USD 1,414.7 million," the IMF said in a statement. The IMF added, "The arrangement aims to support the authorities' implementation of their ambitious reform agenda and catalyze concessional donor financing." "This will help the country build greater economic resilience, promote higher and more inclusive growth, and reduce poverty and raise living standards," it continued. Meanwhile, the chiefs of the World Bank David Malpass and IMF Kristalina Georgieva announced in a joint statement a "landmark achievement" for Sudan as it has reached "the Heavily Indebted Poor Countries (HIPC) Decision point". "This landmark achievement sets Sudan on the path to freeing the country from the heavy debt burden inherited from the past," they said. They congratulated the Sudanese government and people "for their commendable hard work and progress toward this remarkable milestone". "We thank all those donors and partners who have contributed to this effort, including much needed early support to protect the most vulnerable, through the $820 million Sudan Family Support Program jointly financed with IDA pre-arrears clearance grants and donor support," they added. Furthermore, the US Department of Treasury said in a statement it welcomes Tuesday's announcement from the IMF that Sudan has "successfully cleared roughly $1.4 billion in arrears to the IMF and commends Sudan's civilian-led transitional government" for reaching the first phase of debt relief under the HIPC initiative. "This is a historic moment for Sudan and its people," said Secretary of the Treasury Janet Yellen. "The US 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." She affirmed that "these steps will unlock much-needed financing and will help build the foundation for poverty reduction, inclusive development, and economic growth". 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 Treasury noted. 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 $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. In addition, as Sudan continues on its path towards peace, stability and development after more than 30 years of isolation from the international financial system, the normalization of its relations with the international community will enable access to critical additional financial resources to strengthen the economy and improve social conditions. "Today 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," said Malpass following the World Bank Executive Board discussion on June 28, 2021. "The World Bank has been providing pre-arrears clearance grants to Sudan and supporting the Sudan Family Support Program, and I am looking forward to further scaling up our engagement to improve the living conditions of the Sudanese people." "I would like to congratulate the Sudanese government and people for their steadfast efforts over the past year leading to this historic milestone under challenging conditions exacerbated by the COVID-19 pandemic," said Georgieva. "Successful reform efforts have laid the groundwork for fostering inclusive economic growth and addressing the needs of the most vulnerable people. Sudan needs to sustain and expand the implementation of these reforms — and in doing so it can count on the IMF's continuous support to secure a more prosperous future." "This decision is an important milestone which will support Sudan's reform and development agenda and our efforts to move away from the past and foster better lives for our people," said Abdallah Hamdok, prime minister, Republic of Sudan. "The journey leading to this decision required hard work, dedication and strong partnership with the international community. This is a big day for Sudan and reaffirms that all the efforts and sacrifices of Sudanese people are recognized and rewarded. The government of Sudan expresses its appreciation to the IMF, the World Bank Group, and other partners for their unwavering support and to the Sudanese people for their resilience, patience, and dedication in these trying times." — Agencies
