Western powers led by France aim to integrate Sudan into global economy
All eyes are on Sudan as French President Macron looks for new markets where France has little presence in Africa.
The global initiative led by French President Emmanuel Macron is aiming to uplift Sudan from its burden of external debt in a bid to rebuild the country on the ashes of the autocratic rule of Omar al Bashir, whose decades of rule were marked by sanctions and hardship.
The first step was taken at the Africa Finance Summit this week in which Sudan’s debt of around $50 billion, was on the top of the agenda.
During Bashir’s rule, the country had built up huge arrears which it struggled to pay back.
As a result, for the transitional government to launch economic reforms and attract desperately needed investment, Khartoum needs the IMF and World Bank to unlock the Highly Indebted Poor Countries (HIPC) scheme which would pump international financing into the country’s crippling economy.
But the transitional military-civilian power-sharing government is struggling to pull the country out of a deep economic crisis with inflation at over 300 percent and shortages in basic goods fuelled by a lack of foreign currency reserves.
The burden of debt
Hosting the summit attended by the IMF and World Bank, Paris confirmed that it would facilitate a $1.5 billion bridge loan to clear Sudan's dues to the IMF.
But it doesn't end there. Once the arrears to global institutions are settled, Sudan would need to move forward to solve the debt crisis to bilateral creditors.
Hence, the broader debt relief effort was touted by French President Macron who said his country was in favour of fully cancelling the $5 billion it is owed by Khartoum.
Other European nations have followed suit. Italy and Germany committed to clearing their share of Sudan's debt, which totaled $1.8 billion, Sudan’s foreign ministry announced. Norway’s ambassador to Khartoum said that her country would cancel its debt of $100 million.
Calls from Europeans to cancel Sudan’s debt were echoed among Gulf states. Kuwait, Sudan's largest creditor by far at $9.8 billion, said in a statement it would support debt "resolution" discussions, stopping short of saying it would forgive the debt.
Saudi Arabia, Sudan's third-largest creditor at about $4.6 billion, has also said it will press strongly for a broad agreement on debt.
The cancellation of Sudan’s debts to the Paris Club members would bring significant positive changes to Sudan’s crippling economy as the debt to those countries represents around 38 percent of Khartoum’s total foreign debt.
It is no surprise that Sudanese officials left the summit happy.
Sudan’s Prime Minister Abdalla Hamdok called the summit a "major achievement in the right direction of our transition", adding that "what we did on the debt front is marvellous."
The head of Sudan's civilian-military ruling council General Abdel Fattah al-Burhan said "the people of Sudan will never forget this gesture".
In the conference, heads of states also discussed investment opportunities. The countries which cancelled Sudan’s debt will also look to exploit Sudan’s untapped natural resources as they are touting reforms in the banking sector and showcasing projects worth billions of dollars in energy, mining, infrastructure and agriculture.
Why Macron?
Macron’s efforts to lead the debt relief campaign has also raised eyebrows.
Presenting a strongman persona on the stage, Macron tries to strengthen France’s paternalistic relations with its former colonies and beyond in Africa, as his policy has witnessed multiple setbacks over the years.
Projecting a strongman persona, Macron has tried to strengthen France’s paternalistic relations with its former colonies and beyond in Africa, although his policies have experienced multiple setbacks in the region over the years.
The French President has sought to explore new markets on the continent, seeking to build ties with emerging countries that were not colonised by France like Nigeria, Kenya, South Africa and Ethiopia. In that sense, Sudan’s huge economic potential is attractive to Paris.
In terms of politics, Macron believes that Sudan can be “a model” for Africa and the Arab world as the new government of Sudan drops the Islamic rules in its constitution and moves in a more secular direction.
Calling the old rule “Islamist” and hailing Sudan's transition as "an inspiration" and a "precedent" in his speech, Macron said that the international community has a "collective responsibility" to realise its goals.
However, his so-called pro-democratic stance in Sudan is inconsistent with French policy in the continent. France, despite its infamous record of human rights violations, continues to back the Egyptian autocrat Abdelfettah al Sisi as well as the Libyan warlord Khalifa Haftar who has committed serious crimes and has endorsed the military regime in Chad.