Sudan confirms $1.5bn bridge loan from France to clear IMF arrears

By Nicholas Norbrook
Posted on Monday, 17 May 2021 15:35

International Conference in support of Sudan in Paris
French President Emmanuel Macron welcomes Sudan's Prime Minister Abdalla Hamdok as he arrives to attend the International Conference in support of Sudan at the Temporary Grand Palais in Paris, France, May 17, 2021. REUTERS/Sarah Meyssonnier

Sudan continues its quick step reintegration with international partners, confirming a $1.5bn bridge loan from France to clear arrears with the IMF, at a meeting of global investors Monday in Paris. In the audience: Nigerian billionaire Aliko Dangote and Sudanese philanthropist Mo Ibrahim, alongside major French business leaders.

The announcement follows a bridge loan from the US to clear $1.15bn in arrears with the World Bank, and a deal with the UK and European countries to clear a $425m backlog with the African Development Bank.

France’s economy minister Bruno Le Maire said the country would support Sudan in its quest for debt relief, including fresh concessionary loans, as it works to rebuild the banking sector after three decades of sanctions and isolation from the global financial system.

“We have worked with Sudan’s central bank, stress-testing each Sudanese financial institution to map the impact of currency liberalisation,” said Le Maire.

The aim is to push for debt relief of up to $50bn, with the country looking to qualify for the Highly Indebted Poor Countries programme in June.

For Sudan’s Prime Minister Abdalla Hamdok, the audience of heavy-weight African and Western investors at the MEDEF hall in Paris was a chance to lay out the breakneck speed of reforms over the past year. Watching from the second row were Nigerian billionaire Aliko Dangote, Africa’s richest man, and Mo Ibrahim, a Sudanese telecoms pioneer.

It is, says Hamdok, “a model of partnership between civilian and military government, hopefully to deliver democracy.” He argues that the political dispensation is by no means resolved. He wants a constitutional conference — “not an event, but a consultative process” — to help pull together what remains a country fractured along ethnic and regional lines.

Over the past 12 months, Sudan has:

  • been removed from the US list of countries deemed to be state sponsors of terrorism;
  • put in place the basis for a conventional banking system, alongside the traditional Islamic banking sector;
  • unified the exchange rate, “something they told us was impossible a year ago,” says Hamdok;
  • and reformed the tax code and brought in investor-protection laws.

International partners rally round

The World Bank vice-president for Eastern and Southern Africa Hafez Ghanem says he is “very excited” about Sudan, “because of the macro-economic reforms undertaken, essential for laying a foundation”. He announced that the World Bank is launching a nearly $2bn investment programme in the country over the next 15 months.

Afreximbank president Benedict Oromah, who leads one of the few institutions that have not exited the country during difficult years, also announced a support package: a $700m trade-finance facility for investors. He told participants: “First movers in new markets are the biggest winners.”

Sudan’s finance minister Jibril Ibrahim — an Islamist and best known as the historic leader of the Justice and Equality Movement that fought government forces in Darfur from 2003 — is a good example of the compromises that Hamdok has managed to pull off to bring peace to the country.

Ibrahim says agriculture and agribusiness are key first points of entry for investors, pointing to big consumer markets to the north in Egypt and east in the Gulf. “It is about connecting to all the landlocked countries behind Sudan, too,” he said.

The energy and mining sectors are ripe for investment, as well, said Ibrahim. “Of the 36 oil concessions in Sudan, just six are in production”. Meanwhile, artisanal miners are operating in 14 of the country 18 provinces.

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