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Saturday October 16th, 2021 11:01PM

Cash-strapped Sudan clears overdue payments to World Bank

By The Associated Press

CAIRO (AP) — The Sudanese government said Friday it cleared all of its overdue payments to the World Bank, a move that gives the highly-indebted country access to new types of international financing for the first time in decades.

This development allows Sudan to resume normal relations with the World Bank after nearly 30 years of suspension, according to a statement released by Sudan's Cabinet. The World Bank said that by clearing its debts, Sudan will have access to nearly $2 billion in grants for poverty reduction and sustainable development.

Sudan accumulated more than $60 billion in foreign debt under dictator Omar al-Bashir, who ruled the country until his ouster in 2019. Sudan had been named a pariah state. The country is now ruled by a joint civilian military government.

“This victory belongs to the Sudanese people who have shouldered the burden of the economic reforms, which have been made difficult by the COVID-19 pandemic," the Cabinet said in a statement. “It is also a significant achievement for Sudan’s Transitional Government as it implements its economic program to realize economic stability, equitable growth, opportunity, and jobs for all Sudanese people.”

Since al-Bashir's ouster, Sudan has been seeking better ties with the West but has been struggling with a huge budget deficit and widespread shortages of essential goods - including fuel, bread and medicine. Last year, Sudan embarked on an economic restructuring program that had been approved by the International Monetary Fund, a backing deemed essential at the time for eventual debt relief by official creditors.

“This is a breakthrough at a time when Sudan needs the world’s help to support its development progress," said World Bank Group President David Malpass, referring to the clearance of Sudan's arrears. He said the steps will put Sudan "on the path to substantial debt relief, economic revival, and inclusive development.”

The U.S. Treasury said Friday that it had provided same-day bridge financing of approximately $1.15 billion to help Sudan clear its arrears, at no cost to U.S. taxpayers.

"It’s an action that will move Sudan one step closer to securing much needed-debt relief and help the nation reintegrate into the international financial community,” said Treasury Secretary Janet L. Yellen

Earlier this year, Sudan has signed an agreement with the United States to normalize ties with Israel. In return, the Trump administration removed Sudan from the U.S. list of state sponsors of terrorism.

The Sudanese government said that it shall soon discuss with the World Bank the schedule for the disbursement of total grants of $2 billion over the next two years. These grants will be earmarked to finance sectors such as infrastructure, heath, education and agriculture, the Cabinet said.

  • Associated Categories: Associated Press (AP), AP World News, AP Business, AP Business - Economy, AP Business - Industries, AP Business - Financial Services
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