Ben Eguzozie, in Port Harcourt
War-harried Sudan has had its debt arrears of $413 million owed the African Development Bank (AfDB) written off by the bank’s boards of directors, approving a proposal for clearance of the arrears on loans owed by the country messed up by its former brute leader, Omar al-Bashir.
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AfDB described the move as “marking a major milestone in the Sudan’s re-engagement with international financial institutions and the global economy.”
Late last year, the United States government de-listed the North-east African country from the US’ “state sponsors of terrorism (SST) list.”
Economic and development experts have been analysing it as coming as “a game-changer” for the country’s battered economy after 30 years of corrupt Islamist rule, supervised by ousted president Omar al-Bashir.
Tens of startups in the country, which saw three decades of misrule by the ousted dictator, are beginning to see individuals and corporates now able to send and receive money to and from Sudan which had not been possible while international banks faced sanctions for dealing with the former pariah state.
AfDB Board said the debt cancellation proposal enables it to proceed with clearing Sudan’s arrears with the AfDB Group, with the support of the United Kingdom and Sweden.
The U.K will provide bridge financing to clear Sudan’s arrears to the African Development Fund (ADF), while Sweden has committed to providing grant financing of about $4.2 million to meet Sudan’s burden-share for the operation.
Upon full clearance of the arrears to the AfDB group, sanctions on Sudan will be lifted and a Policy-Based Operation (PBO) will be provided to the country as part of the Bank’s full re-engagement, to complement on-going bank operations.
Clearing of arrears with international financial institutions such as the African Development Bank, the World Bank and the International Monetary Fund (IMF), is one of the preconditions for Sudan under the Highly Indebted Poor Countries (HIPC) initiative. Cameroun, a central African country was the first African nation to come under the IMF-tutored HIPC initiative in 2004.
Raubil Durowoju, the African Development Bank Group’s Country Manager for Sudan said that the arrears clearance would allow the AfDB to fully re-engage with Sudan, opening up new financing opportunities for projects and programs that add further support to ongoing Bank operations.
“With the expected additional financing flows following the arrears clearance, the Bank is looking forward to a new era of fruitful cooperation with Sudan to realize its peoples’ aspiration for prosperity and sustainable development,” Durowoju said.
The arrears clearance will also provide the fiscal space for the North-east African country to embark on a road to sustainable socio-economic development and will complement its efforts to advance its development agenda, which includes consolidating peace, accelerating poverty reduction and generating much-needed financing for transformative and inclusive growth.