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IMF announces financing plan aimed at Sudan debt relief

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FILE PHOTO: International Monetary Fund (IMF) Managing Director Kristalina Georgieva makes remarks at an opening news conference during the IMF and World Bank’s 2019 Annual Fall Meetings of finance ministers and bank governors, in Washington, U.S., October 17, 2019. REUTERS/Mike Theiler/File Photo

The IMF executive board on Monday approved a financing plan “to cover its share of debt relief to Sudan,” Managing Director Kristalina Georgieva announced.

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“This marks a critical step in helping Sudan advance the process of normalizing relations with the international community,” Georgieva said, adding that the “plan relies on a broad effort of IMF member countries, including cash grants and contributions derived from IMF internal resources.”

The amount of the financing was not disclosed, but the IMF and World Bank put Sudan’s total external debt at an estimated $49.8 billion as of the end of 2019.

The US Treasury in March announced $1.15 billion in bridge financing to help clear Sudan’s arrears at the World Bank, a key step in getting relief for the country’s external debt that comes after Khartoum’s civilian-backed government announced reforms.

The aid is part of a rapprochement between the United States and Sudan following the ouster of strongman Omar al-Bashir, who was toppled amid street protests in April 2019.

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In the final months of former president Donald Trump’s administration, the United States removed Sudan from a list of state sponsors of terrorism, a long-sought goal of Khartoum as the designation severely impeded investment.

US President Joe Biden, who took office in January, has continued the thaw, with the Treasury last month encouraging other governments to join in the effort to provide relief under the Heavily Indebted Poor Countries (HIPC) initiative backed by the two Washington-based lenders.

On Monday, Georgieva called the relief “a priority for the IMF.”

“I am encouraged by the support from our members and by their recognition of the progress Sudan has made on economic reforms,” she said.

Debt relief will be delivered “as soon as our members have provided the necessary financial commitments, assuming the authorities continue their strong reform efforts and meet the other requirements stipulated under the HIPC process,” she said.

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