It was expected with great impatience by the Sudanese Prime Minister, the IMF began to erase Khartoum’s gigantic debt. Sudan is the most indebted country in Africa. The IMF will write off 90% of its debt over the next three years, or $ 50 billion. A mushroom that comes with demands, but also an economic boost, Khartoum receives from the same IMF almost $ 2.5 billion under the expanded credit facility.
Prime Minister Abdalla Hamdok had worked for two years to achieve this result. Two years of negotiations with creditors and with the IMF. Two years of painful reforms for the population, such as the end of certain subsidies on bread or petrol, which caused great dissatisfaction.
Khartoum borrowed nearly $ 60 billion, which of course limited its ability to borrow to finance its finances. Now and within three years, this significant weight will have disappeared by 90%. On the condition, however, that Khartoum respects a certain number of commitments, including for good governance and sound management of public finances.
“This is not about falling back into over-indebtedness,” warned the IMF’s chief of staff in Sudan. However, it is not all about consolidating public finances, especially when almost half of the population is living in extreme poverty, and Khartoum has been able to receive a comprehensive aid package: $ 2.5 billion, which will be used specifically to finance its raw material. imports and to straighten the currency.
A sign that times have changed at the IMF compared to the 1990s and their structural adjustment plans, its leaders now insist on the need to strengthen social protection.
?? Due to # Sudan’s commitment to reform in very difficult circumstances, the IMF and the World Bank have decided that the country is entitled to debt relief. If Sudan continues its progress, its debt could eventually drop by $ 50 billion to about $ 6 billion. pic.twitter.com/vWW1LaXEmm
– IMF (@IMFNews) June 30, 2021
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