IMF: ‘Removal from terrorism list first step in debt relief for Sudan’

The International Monetary Fund (IMF) states that the removal of Sudan from the US list of State Sponsors of Terrorism eliminates one of the obstacles blocking debt relief from the Heavily Indebted Poor Countries initiative launched in 1996.


The International Monetary Fund (IMF) states that the removal of Sudan from the US list of State Sponsors of Terrorism eliminates one of the obstacles blocking debt relief for Sudan. 

Carol Baker, head of the IMF mission to Sudan, said that Sudan still owes money to the IMF, the World Bank and the African Development Bank, and cannot obtain new funds from these institutions until a settlement has been agreed upon.

To reach a settlement, Baker said that certain conditions must be met. This includes a ‘‘strong performance’’ from the Sudanese authorities during a economic programme monitored by experts from the IMF. It also requires support from the majority of donors, including the United States, to settle debts with international financial institutions.

“These steps will take time and will require patience and hard work from the government and its partners in the international community. I am optimistic that these steps can be achieved”, Baker said.

Heavily Indebted Poor Countries initiative was launched in 1996 by the IMF and the World Bank. The HIPC initiative targets 39 countries, most of them in sub-Saharan Africa. 37 of them have been granted some level of debt relief, 31 of them in Africa. These countries include Somalia, Ethiopia, Central African Republic, Chad, and Democratic Republic of Congo.

IMF monitoring programme

The IMF Board already decided on September 23 to start a 12-month ‘Staff-Monitored Programme’ (SMP) “to support the government’s home-grown programme of reforms aimed at stabilizing the economy, improving competitiveness, and strengthening governance. The period that will be monitored starts at July 1, 2020. The Sudanese government asked the IMF for this monitoring programme.

Antoinette Sayeh, Deputy Managing Director of the IMF and former Minister of Finance of Liberia, said in September: “Sudan’s external debt is high and with longstanding arrears which severely limit access to external borrowing. In particular, Sudan remains unable to access IMF resources because of its continued arrears to the Fund. A strong track record of macroeconomic performance and implementation of reforms, together with a comprehensive strategy of arrears clearance and debt relief supported by Sudan’s development partners, is required for addressing Sudan’s high debt overhang.”


IMF Deputy Managing Director
Antoinette Sayeh (IMF)


Acting Minister of Finance Heba Mohamed said in September that the implementation of the programme will make Sudan eligible for more than $1.5 billion annually in direct development grants to stimulate investment and revive the economy.

The acting Minister of Foreign Affairs, Omar Gamareldin, admitted yesterday that debt relief needs time and will not be completed overnight. In a press statement he said that Sudan's return to the international financial system will also take time due to the bureaucratic procedures involved.

Huge debt

Sudan’s huge debt is mainly due to accrual of interest and steep penalties when the Sudanese government fell behind on its payments. For example, a single $ 130 million loan from Kuwait from the late 1970’s has now exploded to a $2.8 billion debt. Sudan owes $60 billion to other countries and financial institutions as the International Monetary Fund (IMF).

Debt relief for Sudan has been discussed since the Hamdok-government took office. In October 2019, the then Sudanese Minister of Finance Ibrahim El Badawi discussed debt relief with the French Minister of Finance and the director of the French Treasury. France is one of Sudan's largest creditors among the members of the Paris Club. The Paris Club is a group of countries, mainly in Europe and North America, that tries to find co-ordinated and sustainable solutions to payment difficulties experienced by debtor countries. Its secretariat is located in Paris.

During the High-Level Sudan Partnership Conference, co-hosted by Germany, the European Union, the United Nations, and Sudan, in Berlin on June 25, the international community pledged a total of $1.8 billion to support Sudan’s economic reforms.

In October, the World Bank approved a grant (pre-arrears clearance) of $200 million to support the efforts of the Sudanese government in implementing its programme for economic reforms.

US trade delegation

The Minister of Finance, Heba Mohamed, announced that Sudan will receive a trade delegation of CEOs from the 10 largest American agricultural companies in the coming days in a bid to attract new investments. Delegations of business leaders from other sectors are expected to follow.

Sending trade delegations to Sudan has been made possible by the decision of the US President to remove Sudan from the US State Sponsors of Terrorism (SST) list two days ago.

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