(Ecofin Agency) - Sudan has just obtained the cancellation of $5.4 billion of its debt to France and Germany. The announcement was made on Monday, May 17, during the International Conference to Support the Sudanese Transition.

In a speech delivered at the press conference closing the meeting, French President Emmanuel Macron said his country was willing to waive the money owed by Sudan. "We are in favor of a pure and simple cancellation of the debt owed by Sudan, which is as you know, the largest among the members of the Paris Club. We are in favor of the cancellation of almost $5 billion," the French President said.

This announcement comes after the French Minister of Economy, Bruno Lemaire, announced a bridge loan of $1.5 billion to help Khartoum clear its arrears to the International Monetary Fund (IMF). The move is part of the process of reducing the debt burden of Sudan, which hopes to benefit in the coming months from the Heavily Indebted Poor Countries (HIPC) initiative.

“To trigger the Sudanese debt relief, two essential conditions had to be met. On the one hand, the settlement of Sudan's arrears with the multilateral financial institutions (IMF, World Bank, ADB), and on the other hand, the implementation by Sudan of economic reforms showing the seriousness and rigor of the new authorities. I can tell you very clearly today that these two conditions have been met. This conference is a success, and the conditions that alone made it possible to open the HIPC debt reduction initiative have been met," said Emmanuel Macron.

"We have taken our responsibilities to allow Sudan to settle its arrears [...] The new Sudanese authorities have also fulfilled their part of the contract [...] Everything is therefore in place, and we can move forward towards the launch of the debt reduction process. This process will be formalized in a few weeks by the IMF [...] Everyone will then be able to say what effort they can make,” he added.

Since its removal from the U.S. terror list, Sudan has managed to settle a debt of nearly $1.2 billion owed to the World Bank, thanks to a previous bridge loan obtained from the United States. In April, $413 million owed to the African Development Bank (AfDB) was also repaid thanks to a joint loan from the UK and Sweden. By June, the North African country is expected to receive guarantees from several of its other bilateral creditors for a restructuring of its debt under the HIPC initiative.

Germany has also pledged to write off more than $440 million of the debt owed by Sudan, according to a statement by German Foreign Minister Heiko Maas. Berlin also plans to grant Khartoum about $109 million to help it clear its arrears to the IMF.

Moutiou Adjibi Nourou