Sudan’s $60 Billion Debt in Focus at Paris Conference
(Bloomberg) -- Sudan’s leaders are in Paris to drum up international investment as they try to slash the country’s $60 billion of debt, a vital step in turning around a ravaged economy.
France is offering a $1.5 billion bridge loan that will help clear Sudan’s arrears with the International Monetary Fund, Finance Minister Bruno Le Maire told a business forum Monday. President Emmanuel Macron later in the day opened a conference to support Sudan attended by its Prime Minister Abdalla Hamdok and dozens of other Sudanese officials.
Securing relief for Sudan’s debts to the IMF and other members of the Paris Club is the priority of the events, Finance Minister Gebreil Ibrahim, who gave the $60 billion figure for Sudan’s total debt, told state TV before traveling to France. Sudanese ministries are also presenting proposals to attract investment in sectors including infrastructure, industry, oil, electricity and agriculture, he said.
The stakes are high for Sudan, where long-time dictator Omar al-Bashir was ousted by the army amid a popular uprising in 2019 and that’s planning sweeping reforms to rescue an economy wrecked by decades of corruption, mismanagement and sanctions.
Real gross domestic product contracted 3.6% in 2020, according to the IMF, while inflation is running at over 300%, piling pressure on a transitional government that’s an uneasy coalition of civilian and military figures.
The U.K. and the U.S. have already provided bridge loans that helped clear Sudan’s arrears with the African Development Bank and World Bank, respectively. Settling Sudan’s arrears with the IMF may pave the way for the country to receive debt relief under the so-called heavily indebted poor countries, or HIPC, initiative.
The clearance with the three lenders will also “allow for a higher degree of multilateral financing,” according to Mark Bohlund, senior credit analyst at REED Intelligence. If there’s a decision on HIPC by June as expected, Sudan could see interim relief on part of the around $40 billion it has in bilateral debt, which is likely to happen in the second half of the year, he said.
State-run TV in Sudan on Monday reported Saudi Arabia had confirmed its readiness to forgive $4.5 billion in Sudanese debt. There were no further details on if or when such a step would happen.
Sudan is set to receive $2 billion in World Bank grants within 10 months, an official from the lender said Monday. The African Export-Import Bank also announced it is planning to provide $700 million in financing for power and telecommunications projects.
©2021 Bloomberg L.P.