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economist: Abraham’s accords and US loan will help revitalize Sudanese economy | Voice of America

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Sudan took another big step this week towards returning to the international community and losing its pariah state label by officially signing an agreement to normalize relations with Israel.

Sudan, which once hosted al-Qaeda leader Osama bin Laden, had previously agreed to improve relations with Israel, but formalized it on Wednesday during the visit of US Treasury Secretary Steven Mnuchin and Sudanese minister of Justice who signed the Abrahamic Agreements in Khartoum.

The agreement aims to strengthen relations between Arab countries and Israel. As part of the deal, the United States removed Sudan from its list of states that sponsor terrorism. Mnuchin also signed a pledge to provide Sudan with a $ 1 billion bridging loan, which will help Sudan clear its debt to the World Bank and open doors for it to acquire foreign direct investment.

Sudan signs Abraham’s accords, normalizing relations with Israel

Sudan has agreed to sign the agreements in part so that the United States will remove it from its list of terrorist sponsoring states, freeing its access to loans.

Khartoum-based economic analyst Samah Salman said Sudan is in desperate need of US money to emerge from its economic crisis. Speaking to VOA’s South Sudan in Focus, she noted that the country has an external debt of $ 60 billion, of which about a quarter is in arrears.

“The government has a huge budget deficit. The 2021 national budget is only approved this week and the country is in a situation of widespread shortage of essentials, including fuel, bread and medicine, ”said Salman.

Salman said the US loan will have a positive long-term impact on the faltering economy of Sudan.

“In the short term, the Sudanese people do not seem to benefit immediately from the signing of this memorandum of understanding, because in recent months, annual inflation has continued to skyrocket to over 200%,” he said. she declared. “Now, this does not mean that there is no impact or benefit in the medium or long term for Sudan, as the signing will obviously help to clear the arrears of Sudan to the World Bank and, this doing so will give Sudan access to more than $ 1 billion annually from the World Bank for the first time in 27 years.

Mnuchin said so during the signing ceremony on Wednesday.

“You will be able to use this withdrawal, clear the arrears and it will create important positive opportunities for Sudan,” he said.

Mnuchin is the second senior US official to visit Sudan in recent months, after Secretary of State Mike Pompeo in August. The country was removed from the list of US states that support terrorism in December.

Sudanese Minister of Justice Nesraldin Abdelbari said Sudan welcomes “the warming of relations between Israel and the countries of the region as well as the start of diplomatic relations on our part”.

Once Sudan has access to foreign financing, Salman said, the country will be able to redevelop its agricultural sector, electricity and infrastructure, all of which have deteriorated significantly since the 1990s.

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