France said on Monday it would provide Sudan with a $1.5 billion bridge loan to pay off its arrears to the International Monetary Fund, a move that should pave the way for wider relief on the African nation’s external debt of at least $50 billion.
French Finance Minister Bruno Le Maire said the loan would be confirmed by President Emmanuel Macron at a summit in Paris at which Sudan hopes to entice investors to rebuild its battered economy.
IMF members would still need to pledge to cover the arrears in order for the IMF to pay back the bridge loan. These pledges are expected to be made later on Monday and would help broader economic reform efforts in Sudan, Macron said.
“The reduction of Sudan’s debt that we are going to soon initiate is a first result of these reforms, and this trajectory … should be consolidated, both economically and politically,” Macron said at the opening of the conference attended by officials from Egypt, Europe, the United States and international financial institutions.
Sudan is emerging from decades of economic sanctions and isolation under former President Omar al-Bashir, who was ousted by the military in April 2019 after an uprising.
A transitional government appointed under a military-civilian power sharing deal is trying to pull the country out of a deep economic crisis with inflation at over 300% and shortages of basic goods.
Sudan built up huge arrears on its debt, but has made rapid progress towards having much of it forgiven under the IMF and World Bank’s Highly Indebted Poor Countries (HIPC) scheme, allowing Sudan access to cheaper international financing.
Sudan recently cleared arrears to the World Bank and the African Development Bank with bridge loans from Western states. In order to move forward to a “decision point” that would unlock the HIPC process in June, it must clear its arrears to the IMF as well.
Key recent reforms under an IMF monitoring programme include cutting fuel subsidies and sharply devaluing the currency.
One of the Paris conference’s goals is to drum up interest in investment. Projects worth billions of dollars in energy, mining, infrastructure and agriculture would be on offer, said Khalid Omar Youssef, Sudan’s minister for cabinet affairs.