International Monetary Fund (IMF) member countries have agreed to clear Sudan’s arrears to the institution, with France announcing plans for full clearance of the $5 billion Sudan owes it. This happened at a Paris conference gathering African leaders and international creditors, to promote debt relief and investment in the African country.
Furthermore, France will provide a $1.5 billion loan to clear Sudan’s arrears to the IMF.
According to the French president, Emmanuel Macron, other pledges made by IMF member countries such as the United States, Britain, and Saudi Arabia, allow the IMF to cover the arrears and repay the bridge loan and help broader economic reform efforts in the African nation.
Sudan built up huge arrears on its debt but has made rapid progress towards having much of it forgiven under the IMF and World Bank’s Highly Indebted Poor Countries (HIPC) scheme, allowing Sudan access to cheaper international financing.
The country recently cleared arrears to the World Bank and the African Development Bank (AfDB) with bridge loans from Western states. To move forward to a “decision point” that would unlock the HIPC process in June, it needed to clear its arrears to the IMF as well. The HIPC process operates by consensus whereby debt is restructured along similar terms for all creditors.
With the country’s arrears to multilateral lenders settled, it can now move forward to paying its $38 billion debt to bilateral creditors. Of its bilateral debt, about half is with Paris Club members. Some 10-14% ($6 billion) of its external debt is commercial debt, an unusually high proportion.
The country’s ministry of foreign affairs said Italy and Germany had committed to clearing their shares of Sudan’s debt, totalling $1.8 billion. Additionally, Norway’s ambassador to the country said they would cancel its debt, listed at $100 million.
France is the country’s largest Paris Club creditor, followed by Austria. The country’s foreign debt currently stands at $70 billion.