The World Bank and the International Monetary Fund (IMF) on Tuesday announced a landmark achievement for Sudan under the Heavily Indebted Poor Countries (HIPC) initiative.
Under the initiative, Sudan could receive up to $23.3 billion debt relief from its creditors. The amount is over three times the next largest HIPC case, and represents about 36 percent of the total cumulative HIPC debt relief granted for the 37 countries previously benefitting from this initiative.
The president of the World Bank David Malpass and the managing director of the International Monetary Fund (IMF) Ms. Kristalina Georgieva said in a joint statement that Sudan has reached the HIPC decision point.
“We are very pleased to announce a landmark achievement for Sudan, marking another important step in its reengagement with the international community. Today Sudan reached the HIPC Decision point, thus becoming the 38th country eligible to receive debt relief under the initiative, which was jointly launched by the World Bank and the IMF in 1996 to ensure no poor country faces a debt burden it cannot manage,” Malpass and Georgieva wrote.
“This is by far the largest such HIPC operation–with a total debt relief of $23.3 billion in present value terms, which is over three times the next largest HIPC case, and represents about 36 percent of the total cumulative HIPC debt relief granted for the 37 countries previously benefitting from this initiative. This will be complemented by other debt relief initiatives anchored to the HIPC initiative that will bring total debt relief to more than $50 billion in net present value terms, representing over 90% of Sudan’s total external debt. This landmark achievement sets Sudan on the path to freeing the country from the heavy debt burden inherited from the past.”
Sudan completed its exchange rate unification, it cleared its arrears to the International Development Association (IDA) in March, enabling its full re-engagement with the World Bank Group after nearly three decades.
“This paved the way for nearly $2 billion of new IDA grants, including through enhanced IDA support in recognition of its impressive turnaround and sustained reform efforts. Today is also a historic day for the IMF, since arrears to the IMF are now cleared and as of today for the first time since 1974, there are no countries with protracted arrears to the IMF,” they said. “We congratulate 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. We will continue to provide support for Sudan’s economic revival and poverty reduction strategy in the years ahead, and call on the international community to continue to support Sudan in sustaining this momentum.”