Sudan said on Tuesday it had transferred $335 million in compensation to American victims of militant attacks and their families as part of a deal to have it removed from the US list of state sponsors of terrorism.
The announcement by Central Bank Governor Mohamed Zainelabidine came a day after US President Donald Trump tweeted that he intended to lift Sudan from the list.
Acting finance minister Hiba Ali said Sudan needed to accelerate the adjustment of its foreign exchange rate as part of a package to tackle the country’s economic crisis.
The crisis has intensified in the 18 months since former president Omar Al Bashir was removed from office by his generals amid a wave of protests against his 29-year rule.
Ms Ali did not give details but the Sudanese pound, the value of which has been steadily falling against the dollar for months, regained some ground against the dollar after Mr Trump’s announcement.
He has not given detail on when his administration would notify Congress of its decision to take Sudan from the list.
Once removed, Sudan will be allowed to negotiate with its creditors the relief or restructuring of its $60 billion in foreign debt, and be readmitted to the international banking system from which it was cut off as a result of US sanctions.
The US decision would also unlock hundreds of millions of dollars in foreign assistance.
In the past few months, Sudan’s inflation shot up to more than 200 per cent and its currency lost much of its value.
Ms Ali also announced on Tuesday that Sudan was working with the US to finalise the procurement of 1 million tonnes of wheat to ease an acute bread shortage that has led to extremely long lines outside bakeries.
Sudan was added to the state sponsors of terrorism list in 1993 after Al Bashir’s government sheltered the late Al Qaeda leader Osama bin Laden and terrorist groups.
The country was also implicated in the deadly 2000 attack on the US Navy's USS Cole off Yemen's Arabian Sea coast, bombings in 1998 of the US embassies in Kenya and Tanzania, and a 1994 assassination attempt against Egypt's former president Hosni Mubarak in Ethiopia.
Analysts said that the Trump administration might be trying to persuade Sudan to normalise relations with Israel in exchange for removing its name from the terrorism list, causing a split in the transitional government.
Sudan does not share borders with Israel, but has consistently been involved in the Arab-Israeli conflict to champion Palestinian rights and help Egypt, its northern neighbour that fought Israel, in four wars from 1948 to 1973.
“A schism is very possible between the military and civilian components of the government over the question of normalising relations with Israel,” said Sudanese analyst Rasha Awad.
“It is widely suspected that understandings between Washington and Sudan’s top generals have been reached to launch the normalisation process soon after Sudan’s name is lifted from the list.
“I believe Sudan may well be on its way toward normalisation with Israel under pressure from the military.”
But Sudanese Prime Minister Abdalla Hamdok has publicly stated that such a move was too great for a transition government to make. Elections are due in 2022.
The UAE and Bahrain moved to normalise relations with Israel in the summer. They were the first Arab nations to do so since Egypt and Jordan, in 1979 and 1994 respectively.
Sudan and Israel have been inching towards better relations.
In February, Gen Abdul Fattah Al Burhan, head of the civilian-military Sovereignty Council, met Israeli Prime Minister Benjamin Netanyahu in Uganda.
The meeting was soon followed by a decision to allow Israeli airliners to fly through Sudan’s airspace.
”I don’t think that normalising ties with Israel will be a big problem in Sudan,” said Sulaima Ishaq, a prominent Sudanese activist and academic.
“There is still a great deal of support for the Palestinians but news of lifting Sudan’s name from the terrorism list has been met with widespread welcome, given our economic crisis.”
Analysts have warned that heavyweight political groups such as the Umma Party along with small leftist parties were opposed to the normalisation of relations with Israel.
But they say the military’s stand in favour of the move will probably gain more weight through the support of a coalition of rebel groups that signed a peace deal with the Khartoum government this month.
The group, the Sudanese Revolutionary Front, is due to be given seats on the Sovereign Council, the Cabinet and 25 per cent of the 300 seats in a proposed legislature, gaining considerable political influence.
