WASHINGTON (Reuters) – The International Monetary Fund said on Monday it stood ready to help Sudan as it moved towards a broader package of debt relief after Washington pulled the country from its list of Sponsor states of terrorism.
Carol Baker, IMF chief of mission for Sudan, said that Sudan’s removal from the US list has removed one of the obstacles to debt cancellation under the very poor country initiative. indebtedness (HIPC) launched in 1996.
But Sudan is in arrears with the IMF, the World Bank and the African Development Bank, and cannot receive new funds from them until it settles these debts, she said.
To reach this point, four other key conditions must be met that are beyond the control of the IMF, including the strong performance of the Sudanese authorities under an economic program monitored by IMF staff for at least six months, Baker said. .
In addition, Khartoum needs the support of a majority of donors, including the United States, to settle its debts; an arrears settlement plan with international financial institutions; and an external debt reconciliation that specifies what debt is owed by Sudan to whom and on what terms.
“These steps will take time and will require patience and diligence on the part of the government and its partners in the international community,” said Baker, adding, “I hope these steps can be achieved.”
The IMF is expected to conduct its first official review of Sudan’s 12-month economic reform program in February 2021, following a staff visit in November.
The IMF and the World Bank have launched the HIPC Initiative to ensure that no poor country faces a debt burden that it cannot manage. But the process can take years.
Sudan, struggling with $ 60 billion in external debt, urgently needs financial assistance to reorganize its economy. Inflation hit 167% in August and the currency fell as the government prints money to subsidize bread, fuel and electricity.
Reporting by Andrea Shalal, editing by William Maclean