US donates $1bn for Sudan debt relief but more aid worth billions could follow

Battered by decades of isolation and corruption, Sudan's economy could receive a major boost

In this photo provided by United Nations-African Union Mission in Darfur, the joint UN-African Union envoy for Darfur, Jeremiah Mamabolo, left, stands at Khartoum airport, in Sudan, on June 23, 2020. Sudan could receive an additional $1.5 bn in aid following a current debt relief plan and the end of international sanctions. AP PhotoShow less

The US will give a $1 billion bridge loan to the World Bank to help clear Sudan’s arrears with the institution, Sudan’s finance ministry said.

The move opens the door to much-needed funding for the economically ravaged African country.

It is due "in the coming days" and will lead to Sudan regaining access to the World Bank's International Development Association, the ministry said. The comments come after the US on Monday rescinded Sudan's 27-year designation as a state sponsor of terrorism.

The change could in turn allow Sudan to get $1.5 billion in annual development assistance via an initiative for so-called heavily indebted poor countries, according to the ministry. The US government will also provide wheat and unspecified other commodities for four years, it said.

The pledges are the first significant economic boon for Sudan after the US’s long-awaited de-listing. Washington named Sudan a terrorism sponsor in 1993, citing its links with international Islamist-militant organisations under dictator Omar Al Bashir. Four years later, it enacted sweeping sanctions that lasted until 2017.

Dictator’s Legacy

The reversal is another step towards overturning the legacy of Al Bashir, who made the country an international pariah for much of his 30-year rule and was ousted by the army amid mass protests in April 2019.

The ministry also said a delegation involving the 10 largest US agricultural companies will visit Sudan soon to build investment opportunities, followed by officials from other sectors.

Sudan is $1.3 billion in arrears to the IMF and external debt is almost $60 billion, sums that the government is trying to settle.

This satellite image released by the US Department of Defence on August 20 shows the Shifa Pharmaceutical Plant in Khartoum, Sudan, which the Pentagon says was producing components for making chemical weapons before the August 20 attack by US cruise missiles. AFP

Ruins of Shifa pharmaceutical plant, alleged chemical weapons manufacturing facility said bankrolled by Osama bin Laden, cruise missile target in retaliatory US air strikes after terror bombings of US embassies in Africa. Getty Images

Ruins of Shifa pharmaceutical plant, alleged chemical weapons manufacturing facility said bankrolled by Islamic terrorist financer Osama bin Laden, cruise missile target in retaliatory US air strikes after terror bombings of US embassies in Africa. Getty Images

Sudanese President Omar al-Bashir points at the remains of a US cruise missile which hit the al-Shifa pharmaceutical plant one year ago 20 August 1999 in Khartoum. Bashir and several Sudanese officials attended a ceremony at the remains of the factory to mark the anniversary of the US missile strike. AFP

Top US envoy in Khartoum, Charge D'affaires Steven Koutsis, speaks during a press conference at the US embassy on October 7, 2017, a day after Washington lifted its 20-year-old trade embargo imposed on Sudan over alleged support to violent Islamist groups. The US decision came after months of diplomatic talks between the two countries that began during the tenure of former US president Barack Obama. AFP

Alaa Salah, a Sudanese woman propelled to internet fame earlier this week after clips went viral of her leading powerful protest chants against President Omar al-Bashir, addresses protesters during a demonstration in front of the military headquarters in the capital Khartoum on April 10, 2019. AFP

An image grab taken from AFP TV on January 17, 2019, shows people chanting and shouting during a protest calling for the resignation of the Sudanese President in the capital Khartoum. Sudanese police fired tear gas at hundreds of protesters marching towards the presidential palace demanding President Omar al-Bashir's resignation. AFP

Workers operate machinery at Teital Oil Mills in the Sudanese capital Khartoum on November 24, 2019. A year after the start of a protest movement that led to the fall of dictator Omar al-Bashir, Sudan is looking for a fresh start despite a stagnant economy. The United States in 1997 imposed a trade embargo on Sudan for hosting Al-Qaeda leader Osama bin Laden between 1992 and 1996, affecting not only international banking but also technology and trade in spare parts. While the embargo was lifted in 2017, business owners are still unable to invest in their facilities as the country is not part of the global banking system and they are unable to make international money transfers. AFP

Sarah al-Fateh, General Manager at Teital Oil Mills, walks at the facility in the Sudanese capital Khartoum on November 24, 2019. A year after the start of a protest movement that led to the fall of dictator Omar al-Bashir, Sudan is looking for a fresh start despite a stagnant economy. The United States in 1997 imposed a trade embargo on Sudan for hosting Al-Qaeda leader Osama bin Laden between 1992 and 1996, affecting not only international banking but also technology and trade in spare parts. While the embargo was lifted in 2017, business owners are still unable to invest in their facilities as the country is not part of the global banking system and they are unable to make international money transfers. AFP

Sudan's ousted president Omar al-Bashir is escorted into a vehicle as he returns to prison following his appearance before prosecutors over charges of corruption and illegal possession of foreign currency, in the capital Khartoum on June 16, 2019. Bashir was On June 16 seen in public for the first time since being ousted, as he was driven to the prosecutor's office. The former strongman, who ruled his northeast African nation with an iron fist for three decades, was toppled on April 11 after weeks of protests against his reign. AFP

Sudanese protesters wait at a train station in Khartoum to board a train to Atbara on December 19, 2019 to celebrate the one-year anniversary of their protest movement that brought down Omar al-Bashir last April after a thirty-year rule. A year after demonstrations broke out in Sudan over soaring bread prices, celebrations are planned across the country to mark the uprising that brought down veteran autocrat Bashir. AFP

The de-listing was expected after President Donald Trump said in October that Sudan had agreed to make a long-sought payment of about $335 million to US victims of terrorism and their families.

Discussions also brought in Sudan’s fledgling relations with Israel, a country Khartoum had never previously recognised and with which it agreed to a peace deal just days later.

Sudan has agreed only to end a state of war with Israel, but developing relations will be subject to further agreements and needs legislative approval, Foreign Minister Omar Qamar Al Din said in an interview with the pan-Arab Hadath TV channel broadcast on Tuesday.

The Sudanese government, a civilian-military coalition ruling until democratic elections, has not said how the country can afford the compensation payment to US citizens. It is still seeking sovereign immunity to protect it from further legal action in the US, Mr Qamar Al Din said.