The International Monetary Fund (IMF) on Tuesday granted Sudan a $2.5 billion (€2.1 billion) loan, with the African nation also on track to receive debt relief from the institution.

The 39-month IMF Extended Credit Facility loan program will give Khartoum $1.4 billion in immediate funds. 

Sudan hits debt relief milestone

The decision comes after Sudan cleared its roughly $1.4 billion in arrears to the IMF. By paying the arrears, Sudan will be able to access debt relief under the IMF and World Bank's Heavily Indebted Poor Countries (HIPC) initiative.

The HIPC program will provide enough relief to Sudan to reduce the country's current foreign debt burden from an estimated $56.6 billion to $6 billion over roughly three years.

IMF and US officials congratulated Sudan's progress on its debt and its eligibility for relief under the HIPC initative. 

"My warm congratulations to the government and people of Sudan on a landmark achievement: freeing Sudan from the heavy debt of the past and giving it access to significant new resources to build the future," IMF Managing Director Kristalina Georgieva said in a tweet. "We at the IMF will continue to do our part for Sudan's revival!"

US Treasury Secretary Janet Yellen called it a "historic moment for Sudan and its people."

"These steps will unlock much-needed financing and will help build the foundation for poverty reduction, inclusive development, and economic growth," Yellen said.

Sudan's new leaders try different approach on economy, debt

Sudanese Prime Minister Abdalla Hamdok has drastically altered the country's approach towards economic policy and debt. Hamdok has turned toward western countries such as the US and France for debt relief.

The US in December took Sudan off the state sponsors of terrorism blacklist, which could bolster foreign investment.

Earlier this year, the first Visa card was issued in Sudan, which Hamdok hailed as a sign that the country is being reintegrated into the global economy.

Under Sudan's former President Omar al-Bashir, the country experienced international isolation and economic sanctions.

Al-Bashir was deposed by the army in 2019 amid popular protests after serving as president for three decades, which then began the country's transition to democracy.

wd/aw (AFP, Reuters)