ADDIS ABABA – International Monetary Fund (IMF) on Tuesday approved a $2.5bn loan for Sudan, and with the World Bank sealed a landmark deal that unlocks nearly $50bn in debt relief for the impoverished African nation.
The announcement came after the IMF finalised an agreement with 101 donor countries allowing Sudan to clear roughly $1.4bn in arrears to the Washington-based lender – the key hurdle to allow access to fresh aid.
“We congratulate the Sudanese government and people for their commendable hard work and progress towards this remarkable milestone,” IMF chief Kristalina Georgieva and World Bank President David Malpass said in a joint statement.
Payment of the arrears is the “decision point” that allows access to debt relief under the Heavily Indebted Poor Countries (HIPC) initiative, which the officials said would cover $50bn or about 90 per cent of the country’s foreign debt.
Sudan will receive $1.4bn immediately under the 39-month IMF loan programme.
Sudan’s economic crisis, deepened by decades of isolation and sanctions, includes inflation approaching 400 per cent, shortages of basic goods and services and a spike in food insecurity.