A quarter of a century after the International Monetary Fund (IMF) and World Bank launched their Highly Indebted Poor Countries (HIPC) debt relief programme, Sudan can begin to receive relief on its more than $50 billion in debt.
Over the past years, Sudan has pushed through several major economic reforms, including the removal of fuel subsidies and sharp exchange rate devaluation under an IMF-monitored programme required for debt relief.
According to an IMF official last month, Sudan is the penultimate economy to come through the process, and “by far the largest case in absolute terms.”
The IMF is expected to announce an extended credit facility for one of Africa’s populous country which will provide new financing in the form of grants and cheap loans.
“Sudan will proceed to negotiations with the Paris Club in July,this is the result of the patience and strength of the people of Sudan in responding to its economic challenges with reform,” Magdi Amin, Senior Adviser to the country’s Finance Ministry wrote in a Twitter post.
Of the $50 billion debt burden, $19 billion is owed to Paris Club countries and to non-Paris Club countries including Kuwait, Saudi Arabia and China. Its large commercial debts of at least $6 billion are roughly matched by what it owed to multilateral organisations before arrear clearances this year.
The sum could well be larger from debt yet to be reconciled in full and past due interest calculated is estimated to be closer to $60 billion.
The Paris Club will decide on the proportion of debt it will forgive next month.