Saudi Arabia pushes for Sudan’s $50 billion debt restructuring
- 16 May 2021
Saudi Arabia will press Sudan’s creditors to reach a broad agreement to reduce the African country’s $50 billion-plus debt pile, said a Saudi official who will be directly involved in the debt-restructuring talks.
Sudan is battling a crippling economic crisis and pushing through aggressive reforms as it seeks relief from debt owed to foreign states, international financial institutions and commercial creditors.
“In terms of restructuring, we will push the envelope more for everybody to restructure (debt) and provide Sudan with greater breathing space and support for the reforms,” the Saudi official told Reuters on condition of anonymity ahead of a Paris conference on Monday to promote investment and debt relief for Sudan.
“Deferral alone is not going to help... I would be looking for friends like Saudi Arabia and others to provide (debt) haircuts. We will support whatever efforts there are in the international community to provide that.”
Saudi Arabia is Sudan’s third-largest creditor with about $4.6 billion in debt, International Monetary Fund figures show.
Sudan is eligible for debt relief under the IMF and World Bank’s Highly Indebted Poor Countries (HIPC) initiative.
After clearing its arrears with the World Bank and African Development Bank, the remaining hurdle for Sudan to reach the HIPC’s so-called “decision point” is the clearing of its IMF arrears. That point could be reached by the end of June.
The IMF last week approved a financing plan to help mobilise resources needed for the fund to cover its share of debt relief to Sudan. Announcements of contributions from member states are expected to emerge from the Paris conference.
Sudan has so far found support for its debt relief drive from creditors including the United States, France and the United Kingdom.
The Saudi official said his country would utilise its existing special drawing rights within the IMF, as well as a significant cash grant.
“I’m optimistic that by Monday we will bridge the gap and we will make a way forward to a restructuring plan,” the official said.
Sudan’s transitional government led by Prime Minister Abdalla Hamdok, is emerging from decades of economic sanctions and isolation under former President Omar al-Bashir, who was ousted by the military in April 2019 after months of popular protests.
In March Saudi Arabia committed to investing $3 billion in a joint fund for investments in Sudan.
“We are very serious about the $3 billion. We’re (now) talking specifics,” the official said.
“But we want also to make sure that it acts as a catalyst for other investments... not only from countries, but also from the private sector.”
Earlier theCentral Bank of Saudi Arabia announced the introduction of a bank note of SR200 denomination, on the occasion of the 5th year since the launch of the Kingdom’s Vision 2030.
This issue is based on Article No. (4) of Saudi Monetary Law issued by Royal Decree No. (6).
In this regard, the Saudi Central Bank clarified that the Two Hundred Saudi riyal banknote will be put into circulation, together with other current banknotes in all its denomination as official legal tender.
The Central Bank stated that the new Two Hundred denomination was printed according to the latest standards in the field of banknote printing.
The new denomination is characterised by various technical specifications, high-quality security features, distinctive design, and attractive colors, which highlight the design of this denomination.
Noting that the new banknote comes in grey colour with a picture of the founder King Abdul Aziz on the front of the banknote, the logo of the Kingdom’s Vision 2030 in 3D design, in addition to the Saudi Central Bank name, and the banknote value in the Arabic letters and numbers.
The back of the banknote carries an image of “Qasr Al Hukm” in Riyadh City, the Saudi Central Bank name, and the banknote value in the English letters and numbers.
The Saudi central bank has extended a loan deferral programme to help small businesses cope with the fallout of the coronavirus pandemic until the end of the first quarter next year.
The monetary authority said in a statement that the plan has impacted over SAR77 billion ($20.5 billion) of loans and the extension was taken to help support economic growth. Announced in March as one of the kingdom’s first responses to the economic costs of the health emergency, the measures have already been prolonged and were due to expire in December.