US and Sudan agree to settle African country’s debt with World Bank

CAIRO (AP) — The United States and Sudan agreed on Wednesday to settle the African country’s debt to the World Bank, widely seen as a key step towards the country’s economic recovery from the 2019 overthrow of the autocrat of longtime Omar al-Bashir.

The move came during Treasury Secretary Steven Mnuchin’s visit to Khartoum, making him the first senior US official to land there since President Donald Trump’s administration removed the African country from the list of state sponsors of terrorism. .

Mnuchin arrived at Khartoum International Airport, where he received acting finance minister Heba Mohammed Ali and US charge d’affaires in Sudan Brian Shukan, the prime minister’s office said in a statement.

This is the first visit by a serving US Treasury chief to Sudan, the statement said. Secretary of State Mike Pompeo in August became the first senior US diplomat to visit Sudan since 2005, when Condoleezza Rice visited. Pompeo was also the highest ranking US official to visit the African country since al-Bashir was ousted last year.

Mnuchin’s visit came after a day-long visit to Cairo, where he met with Egyptian President Abdel-Fattah el-Sisi, a close US ally. The shutdowns are part of a flurry of activity over the last few days of the Trump administration. Democrat Joe Biden becomes president on January 20.

The US Treasury Secretary has met with Prime Minister Abdalla Hamdok and is expected to meet other Sudanese leaders, including General Abdel-Fattah Burhan, head of the ruling sovereign council.

The visit came “at a time when our bilateral relations are taking historic leaps towards a brighter future. We plan to make tangible progress today as our relationship enters a #NewEra,” Hamdok tweeted.

Mnuchin’s one-day visit focused on the country’s struggling economy and possible U.S. economic aid, including debt relief, the statement said. Sudan now has more than $60 billion in external debt. Relief from its arrears and access to foreign loans are widely seen as its gateway to economic recovery.

Sudan’s finance ministry said it had signed a “memorandum of understanding” with the US Treasury Department to facilitate payment of Sudan’s arrears to the World Bank.

The ministry said the settlement would enable the Sudanese government to get more than $1 billion a year from the World Bank, for the first time in nearly three decades when Sudan was designated a pariah state. He did not provide further details.

The Justice Department, however, announced last month that the United States would provide a $1 billion bridge loan to the World Bank to help settle Sudan’s arrears to the institution, in addition to a direct and indirect aid of US$1.1 billion.

Sudan is on a shaky path to democracy after a popular uprising led the military to overthrow al-Bashir in April 2019. The county is now ruled by a joint military-civilian government that seeks to build better relations with Washington and the West.

The government is grappling with a huge budget deficit and widespread shortages of essential goods, including fuel, bread and medicine.

Annual inflation has topped 200% in recent months as prices for bread and other staples have surged, official figures show.

Last month, the Trump administration finalized the removal of Sudan from the US list of state sponsors of terrorism. This decision was a key incentive for the government in Khartoum to normalize relations with Israel.

The two countries, Sudan and Israel, have agreed to maintain full diplomatic relations, making Sudan the third Arab state – after the United Arab Emirates and Bahrain – to move to normalizing relations with Israel late last year. Morocco has also established diplomatic relations with Israel.

Sudan’s economy has suffered from decades of US sanctions and mismanagement under al-Bashir, who has ruled the country since an Islamist-backed military coup in 1989.

The designation dates back to the 1990s, when Sudan briefly hosted al-Qaeda leader Osama bin Laden and other wanted militants. Sudan has also reportedly served as a pipeline for Iran to supply weapons to Palestinian militants in the Gaza Strip.

Mnuchin’s visit came amid growing tensions between military and civilian members of Sudan’s transitional government. That the tensions, which have resurfaced in recent weeks, have largely centered on the economic assets of the Sudanese military, over which the civilian-run finance ministry has no control.

John Prendergast, co-founder of watchdog group The Sentry, has urged the US Treasury Secretary to pressure the military and security apparatus to allow “independent oversight” of the companies they control.

“As Secretary Mnuchin engages with leaders in Khartoum, it is essential that he provide strong support for international anti-money laundering standards and tax transparency, which are essential for Sudan to be able to counter the plunder of its national economy,” he said.

FILE – In this Dec. 10, 2020, file photo, Treasury Secretary Steven Mnuchin testifies before a Congressional Oversight Committee hearing on Capitol Hill in Washington. (Sarah Silbiger/The Washington Post via AP, Pool, File)

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