The International Monetary Fund (IMF) has approved close to $56 billion in debt relief for Sudan, accepting the country into the Highly Indebted Poor Countries (HIPC) initiative. This is alongside a new IMF funding of $2.5 billion over three years, under its Extended Credit Facility. The decision comes after Sudan cleared its $1.4 billion in arrears to the IMF.
The IMF immediately disbursed $1.4 billion of the total in order to repay France, with the remainder to be disbursed over the next 39 months.
The HIPC program will provide enough relief to Sudan to reduce the country’s current foreign debt burden from an estimated $56.6 billion to $6 billion over roughly three years.
Sudan’s economic crisis includes:
- Inflation that is close to 400%.
- A shortage of basic goods and services.
- A rise in food insecurity.
Under Omar al-Bashir, ousted as president after a popular uprising in April 2019, Sudan accumulated massive arrears, or unpaid interest and penalties, that grew to account for 85% of the country’s total debt.
In a March report, the IMF said the country owed $19 billion to Paris Club countries and the same to non-Paris Club countries, including Kuwait, Saudi Arabia, and China as of the end of 2019. Its large commercial debts of at least $6 billion are roughly matched by what it owed to multilateral organizations.
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