The African Development Bank Group (AfDB) has completed the arrears clearance process to clear about $413 million in arrears on loans that Sudan owed, enabling the East African country to have immediate access to new financing. This follows the approval of a proposal submitted to the Group for consideration.
Meanwhile, support of the United Kingdom government made it possible to clear the arrears. The UK helped bridge financing of GBP148 million to clear Sudan’s arrears to the African Development Fund. Also, Sweden provided grant financing of about $4.2 million to meet Sudan’s burden-share for the operation.
Moreover, the Republic of Ireland has committed to providing EUR150,000 towards Sudan’s future debt service.
Consequently, the Bank Group has lifted the sanctions on Sudan. Discussions are underway to develop a policy-based operation for the country. This forms part of the Bank’s full re-engagement with Sudan to complement its ongoing operations.
Arrears clearance and the HIPC Initiative
Meanwhile, clearing arrears with international financial institutions is one of the preconditions for Sudan under the Highly Indebted Poor Countries (HIPC) Initiative. This initiative is paramount for clearing other debt owed to the Paris and Non-Paris Club creditors. These international institutions include the AfDB, the World Bank, and the International Monetary Fund.
Furthermore, Abdallah Hamdok, Prime Minister of Sudan expressed appreciation to the Bank Group for its support.
“After a long and challenging but fruitful journey. We look forward to an even stronger relationship with the Bank that will enable us to achieve our development objectives”.
He also expressed appreciation to the UK, Sweden, and Ireland for their roles in facilitating the milestone achievement.
“The UK has provided a bridging loan to enable the clearance of Sudan’s arrears at the African Development Bank. This transaction unlocks important additional programming to help Sudan’s development; another step towards Sudan’s economic recovery and transition to democracy. I commend the work of the Government of Sudan and African Development Bank to make this happen” .Dominic Raab, UK Secretary of State for Foreign, Commonwealth and Development Affairs.
Also, Mr. Per Olsson Fridh stated that Sweden is a strong supporter of Sudan’s democratic transition and reintegration into the global economy. According to him, the clearance of the arrears with the AfDB is an important step for Sudan in this direction.
“Sweden is a proud contributor to this process. Sweden is pleased to see the AfDB’s focus on gender and climate issues in the future cooperation with Sudan; both key to the long-term stability and development of Sudan” .Mr. Per Olsson Fridh Sweden’s Minister for International Development Cooperation.
AfDB’s commitment to Sudan
Furthermore, Dr. Akinwumi A. Adesina expressed his congratulations to Sudan’s government and appreciation to the U.K, Sweden, and Ireland. Dr. Adesina stated that “the perseverance and commitment of the government and people of Sudan has paid off”. According to him, this culminated in “this historic moment that will open new financing opportunities to Sudan”.
Also, Khaled Sherif, noted that the clearance of the arrears allows the AfDB to fully re-engage with Sudan. He indicated that “we will work with Sudan and other development partners to complete the HIPC process”.
Additionally, the Bank Group’s current portfolio in Sudan comprises 19 operations for a total commitment of about $600 million. This spreads across sectors like agriculture, water and sanitation, social and energy, and the private sector.
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