Sudan clears arrears, accesses $ 2 billion in new World Bank funding
WASHINGTON, March 26, 2021 –The Republic of Sudan cleared its arrears to the International Development Association (IDA), which allowed it to fully re-engage with the World Bank Group after nearly three decades, and enabled the country to access nearly $ 2 billion in IDA grants for poverty reduction and sustainable economic recovery. By clearing its arrears, Sudan has also taken a key step towards receiving overall external debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative.
“This is a breakthrough at a time when Sudan needs the world’s help to support its development progress. Steps taken so far, including arrears clearance and exchange rate unification, will put Sudan on the path to substantial debt relief, economic recovery and inclusive development.,” mentionned President of the World Bank Group, David Malpass. “I thank the Government of the United States for its generosity in facilitating the arrears clearance process. I commend the Government of the Sudan for its commitment to reform and look forward to opportunities for greater World Bank Group support to the Sudanese people.. “
IDA is the World Bank’s fund for the poorest countries. Payment of these arrears was made possible through a $ 1.15 billion bridge loan from the United States government. IDA is supporting Sudan’s reform program through a re-engagement and development policy reform operation. The reforms aim to support Sudan’s economic growth and poverty reduction program, make the Sudanese economy more competitive, improve transparency, increase investment, create jobs and strengthen social protection.
“With the clearance of these arrears, we hope to secure funding from the World Bank Group and other multilateral institutions to strengthen our economy and reach all corners of Sudan with transformative development projects.,” mentionned Mr. Gibril Ibrahim, Sudanese Minister of Finance and Economic Planning. “We thank the US government for facilitating this clearance process, which also supports our move towards more comprehensive debt relief.. “
After arrears clearance, Sudan will benefit from unimpeded access to regular World Bank Group financing, including IDA project financing, debt investments and equity investments. the private sector through the International Finance Corporation (IFC) and political risk insurance provided by the Multilateral Investment Guarantee. Agency (MIGA) to facilitate foreign direct investment.
“Today, Sudan has a unique opportunity to set itself on the path of economic and social renewal”, mentionned Hafez Ghanem, World Bank Vice President for Eastern and Southern Africa. “I thank our international partners who have worked with us to bring Sudan to this important milestone and look forward to opportunities for greater World Bank Group support to the Sudanese people.”
To maximize its support to Sudan, the World Bank provided pre-arrears clearance grants totaling $ 410 million to mitigate the impact of economic reforms through the Sudan Family Support Program and to facilitate the re-engagement of the Sudan. This funding was accompanied by $ 410 million in funding from other donors. The program aims to provide cash transfers to 80% of Sudanese families, or about 32 million citizens, to mitigate the impact of short-term economic shocks. The program was launched on February 24, 2021.
The International Development Association (IDA) is one of the most important sources of funding to fight extreme poverty in the poorest countries of the world. IDA provides zero- and low-interest loans and grants to countries for projects and programs that stimulate economic growth, build resilience, and improve the lives of the world’s poor. Since 1960, IDA has provided approximately $ 422 billion for investments in 114 countries. As an institution of the World Bank Group, IDA combines global expertise with an exclusive focus on reducing poverty and promoting prosperity in the world’s poorest countries. Learn more online: IDA.worldbank.org. #IDAworks
The Sudan Family Support Program (SFSP) is supported by several development partners through the Sudan Transition and Recovery Support Multi-Donor Trust Fund (STARS), which includes Canada, the European Union, Finland, France, Germany, Ireland, Italy and the Kingdom of Saudi Arabia. Arabia, Netherlands, Norway, State and Peacebuilding Trust Fund, Sweden and United Kingdom. Together, these donors match the support provided by the World Bank Arrears Clearance Grants to bring the total support to the SFSP to $ 820 million..