France announced that it would support Sudan with a bridge loan of $1.5 billion to help it clear arrears with the International Monetary Fund.
Sudan also expressed its hope to attract investors and obtain pledges to pay the arrears with IMF during a conference in Paris, today. This would pave the way for a broader relief of the external debt burdens that may reach $50 billion.
Sudan has accumulated huge arrears on its debts, but it has recently made progress towards canceling a large part of it within the framework of the IMF and World Bank initiative on the Heavily Indebted Poor Countries.
If members of IMF pledge to cover Sudan’s $1.33 billion in arrears to the fund, it is expected that it will move towards a “decision point” that will qualify it for the initiative in June and allow it to obtain international financing at a lower cost.
It is also reported that Sudan settled recently arrears owed to the World Bank and the African Development Bank through bridge loans from Western countries.
A Saudi official, who will participate in the talks to restructure Sudan’s debt, revealed that the Kingdom will press for a broad agreement to reduce Khartoum’s debts, which exceed $50 billion.
The transitional government in Sudan, headed by Abdullah Hamdok, is struggling with a stifling economic crisis and implementing difficult reforms as it seeks to reduce the burden of debt owed to foreign countries, global financial institutions and commercial lenders.
The Saudi official said, before a conference held in Paris today, Monday: “With regard to restructuring, we will press more for everyone to restructure the debts and allow Sudan more room to breathe and support reforms”.
“Postponement alone will not help… I will look for friends like Saudi Arabia and others to allow the debt reduction,” he added. “We will support any efforts by the international community to achieve this”.
According to IMF, Saudi Arabia is the largest creditor of Sudan, with about $4.6 billion.
In March, Saudi Arabia pledged to invest $3 billion in a joint fund to invest in Sudan. “We are very serious about the $3 billion,” the official said. “We are looking into the details now, and we also want to make sure that it is a catalyst for other investments… not only from countries, but also from the private sector”.