On Tuesday, the International Monetary Fund (IMF) granted Sudan a $2.5 billion loan, with the African nation also on track to receive debt relief from the institution. The 39-month IMF Extended Credit Facility loan program will immediately fund the country with $1.4 billion.
The decision has come after the North African country cleared its past debts to the IMF amounting to approximately $1.4 billion. By paying these debts, Sudan will also be able to access debt relief under the IMF and World Bank’s Heavily Indebted Poor Countries (HIPC) initiative.
This program aims to reduce the country’s current foreign debt burden from an estimated $56.6 billion to $6 billion in roughly three years.
Officials from the IMF and the US congratulated Khartoum’s progress on the reduction of its debt and its achievement of being eligible for relief under the HIPC initiative.
The IMF’s Managing Director Kristalina Georgieva extended her “warm congratulations to the government and people of Sudan on a landmark achievement: freeing Sudan from the heavy debt of the past and giving it access to significant new resources to build the future,” in a tweet shared from her official account. She further stated that the IMF will continue to do its part for “Sudan’s revival.”
Meanwhile, the Secretary of the US Treasury Janet Yellen defined these developments as a “historic moment for Sudan and its people.” She added that these steps will “unlock much-needed financing and will help build the foundation for poverty reduction, inclusive development, and economic growth.”
Sudan has recently turned to Western countries, such as the US and France, to develop its economic policies and debt relief. This was recently materialized in Paris through the International Conference on Sudan on May 17.
Furthermore, Sudan was taken off the state sponsors of terrorism blacklist in December 2020, which could further bolster foreign investment into the country.