Sudan will sell its Special Drawing Rights at IMF, says finance minister
October 23, 2022 (KHARTOUM) –Finance Minister Gibril Ibrahim announced that his government plans to sell Sudan’s Special Drawing Rights (SDR) to the International Monetary Fund (IMF) as the country has no sufficient resources to fund its programmes.
Sudan has the equivalent of one billion dollars of SDR, which is part of a loan of 2.4 billion dollars approved by the IMF on June 29, 2021. the remaining 1.4 billion dollars served to pay off its debts to the Fund.
The loan was agreed upon within the framework of international efforts to support the civilian government to become eligible to benefit from the Heavily indebted poor countries (HIPC) initiative after 30 years of international isolation.
After his return to Khartoum, Ibrahim spoke to the official Sudan TV on Saturday about his participation in the annual meetings of the Boards of Governors of the International Monetary Fund, the World Bank Group, central bank governors, and finance ministers, which were held in Washington, DC, from October 10 to 16.
He said he discussed with the financial institutions ways to provide his ministry with the necessary resources to finance the agricultural sector and vital sectors in the country.
According to the minister, IMF staff would resume technical assistance to Sudan and a delegation would arrive in the country soon. Also, he said he received pledges to renew the period granted by the International Monetary Fund to reach the completion point of Sudan’s debt forgiveness.
“We have further identified new means for obtaining loans, including a special window to finance food security. This is a new window that did not exist before, and it is specific to the agricultural sector. The second window is related to the climate change programme,” he said.
“These windows have nothing to do with debt forgiveness,” he stressed.
The minister added that the IMF officials agreed to sell some of Sudan’s SDR.
They agreed to “convert to dollars a part of the Special Drawing Rights that Sudan got last year, which amounts to 650 million SDR, to use it in financing vital sectors in the country,” he further said.
The minister did not specify the SDR amount that converted to one billion dollars. The transitional civilian government planned to use this money as a deposit that would qualify the country for significant loans to rehabilitate the Sudanese economy at the end of the debt relief process.
The military coup that overthrew the civilian government in October 2021 negatively affected the economic situation as the international community and financial institutions suspended their support calling for the restoration of the civilian-led transition.
Sudanese economists reached by Sudan Tribune ruled out the international community would approve such an operation. They added that the sale of Sudan’s SDR would resolve the economic crisis in Sudan.
“The speech of the Minister of Finance indicates his desire to sell Sudan’s rights to some countries to take advantage of those funds to support the collapsed economy,” University economics professor al-Tijani Mustafa told Sudan Tribune on Sunday.
Mustafa pointed out that Ibrahim is struggling to obtain funds to support the 2023 budget, which is fully funded by domestic taxes.
For his part, the economic expert, Mohamed Alnayer, told Sudan Tribune, on Sunday; the money that Sudan may get from the SDR would not solve the economic crisis.
(ST)