In recognition of the commendable efforts in macroeconomic reform, Sudan has received approval from the International Monetary Fund (IMF) for relief under the heavily Indebted Poor Countries (HIPC) Initiative. As the 38th country to reach this milestone, Sudan will be relieved of more than $56 billion to $28 billion in debt. The IMF will provide funding of $2.5billion, a combination of grants and cheap loans, which will provide Sudan with the needed direct financing which will contribute towards reforms also required for permanent debt relief.
Recent economic reforms include the removal of fuel subsidies and a sharp exchange rate devaluation under an IMF-monitored programme, required to enter the HIPC. Another condition for admission to the HIPC was removal from the U.S. list of state sponsors of terrorism, which Sudan achieved last year.
The debt relief will support Sudan in implementing necessary reforms to improve the livelihood of citizens and overall social conditions. The country will be able to proceed with its normalisation of relations with the international community, as it continues its path towards peace, stability and development.
“This is a big day for Sudan and reaffirms that all the efforts and sacrifices of Sudanese people are recognised and rewarded,” said Abdallah Hamdok, Prime Minister of Sudan, in a statement. “The Government of Sudan expresses its appreciation to the IMF, the World Bank Group, and other partners for their unwavering support and to the Sudanese people for their resilience, patience and dedication in these trying times.”
Under the HIPC Initiative, if Sudan continues its steadfast commitment to economic reforms, the IMF states the country has the potential tor each the Completion Point by June 2024, which could reduce debt to $6 billion. It is therefore important that Sudan makes sustainable progress over the coming years, and for donors and the international community to provide Sudan with sufficient support to facilitate its transition to a stronger economy.
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