Sudan: Paris Club suspends debt relief for Sudan due to coup
Paris / Khartoum — The Paris Club* has published its annual report for 2021, in which it explains that the multilateral agreement on debt relief for Sudan through the enhanced initiative for heavily indebted poor countries (HIPC) was suspended “after the removal of the Transitional Government of Sudan by military forces”.
In its press release, the Paris Club explained that it continues to be very active in promoting coordinated multilateral solutions to sovereign debt problems around the world in 2021.
It had aimed to support low-income countries also through the implementation of the HIPC for which the Paris Club signed a multilateral agreement with Sudan on July 15, 2021. “However, after the dismissal of the Transitional Government of Sudan by military forces, the signing of bilateral agreements implementing this multilateral agreement is suspended until the situation improves and implementation of the IMF program resumes,” the statement said.
In the report, the Paris Club explains that it “continued its actions to implement the enhanced initiative in favor of heavily indebted poor countries […] by an agreement to restructure the external public debt of Sudan concluded on July 15, 2021”.
He explained that this enhanced HIPC initiative consists of a two-phase approach: “The first phase, known as the decision point, opens access to interim debt relief; final debt relief is provided at the end of the second phase, the completion point”. So far, 38 countries, including Sudan, have reached the decision point of the enhanced HIPC Initiative and Sudan reached it in June 2021.
“Paris Club members have collectively felt that bilateral agreements cannot be signed until the situation improves”
The report went on to explain that “in light of recent events and the removal of Sudan’s transitional government by military forces, Paris Club members collectively believe that bilateral agreements cannot be signed until the situation will not improve and that the IMF program will not have been implemented. resumes”.
The Paris Club said it continued to “monitor the situation closely, in close collaboration with the IMF and the World Bank Group”.
Immediately after the October 25 military coup, the World Bank announced the suspension of all aid to Sudan and suspended decisions on any new operations in the country.
* The Paris Club (in French: Club de Paris) is a group of officials from major creditor countries whose role is to find coordinated and lasting solutions to payment difficulties encountered by debtor countries. As debtor countries undertake reforms to stabilize and restore their macroeconomic and financial situation, Paris Club creditors ensure appropriate debt treatment.