PARIS (Reuters) – Sudan hopes to entice investors and secure pledges to pay off its arrears to the International Monetary Fund at a conference in Paris on Monday, paving the way for wider relief on external debt of at least $50 billion.
Sudan built up huge arrears on its debt, but recently made rapid progress towards having much of it forgiven under the IMF and World Bank’s Highly Indebted Poor Countries (HIPC) scheme.
If IMF members pledge to cover Sudan’s $1.33 billion in arrears to the fund, it is expected to move forward to a “decision point” that would unlock the HIPC process in June and allow Sudan access to cheaper international financing.
Sudan recently cleared arrears to the World Bank and the African Development Bank with bridge loans from Western states.
A transitional government appointed under a military-civilian power sharing deal is trying to pull the country out of a deep economic crisis with inflation at over 300% and shortages of basic goods.
Key recent reforms under an IMF monitoring programme include cutting fuel subsidies and sharply devaluing the currency.
One of the Paris conference’s goals is to drum up interest in investment. Projects worth billions of dollars in energy, mining, infrastructure and agriculture would be on offer, said Khalid Omar Youssef, Sudan’s minister for cabinet affairs.
Enticing international banks after financial sector reforms is another key objective.
On debt, the conference aims to deal with arrears to international lenders before moving on to bilateral creditors, a French presidency official said. Of Sudan’s bilateral debt, about half is with Paris Club members. Some 10-14% of its external debt is commercial debt, an unusually high proportion, an IMF official said.
China, a major creditor, has reduced and forgiven some debt and will push for the international community to do the same, said Hua Chunying, a foreign ministry spokeswoman.
Saudi Arabia, another big creditor, has also said it will press for a broad agreement on debt.