Abraham Accords: U.S To Revitalize Sudan’s Economy
By formally signing an agreement to normalize relations with Israel, Sudan took another significant step this week towards rejoining the international community and losing its label as a pariah state.
Sudan, once host to al-Qaeda leader Osama bin Laden, had already agreed to strengthen relations with Israel but made it official while visiting the United States on Wednesday. The Abraham Accords were signed in Khartoum by Treasury Secretary Steven Mnuchin and Sudan’s justice minister.
The goal of the agreement is to improve relations between Arab countries and Israel. The U.S. removed Sudan from its list of states funding terrorism as part of the agreement. Mnuchin also signed a pledge to provide Sudan with a $1 billion bridge loan to help Sudan clear its World Bank debt and open the door to direct foreign investment acquisitions.
Economic analyst Samah Salman, based in Khartoum, said Sudan urgently needs U.S. cash to dig out of its economic crisis. According to VOA South Sudan, she states that the nation has $60 billion in foreign debt, of which around a quarter is in arrears.
“The government has a huge budget deficit. The 2021 national budget is only being approved this week and the country is in a situation of widespread shortages of essential goods including fuel, bread and medicine,” Salman said.
The U.S. loan would have a long-term positive effect on the faltering economy of Sudan, Salman said.
“In the short term the Sudanese people are not seen to immediately benefit from the signing of this Memorandum of Understanding, as in the last few months annual inflation has continued to soar at greater than 200 percent,” she said. “Now, that’s not to say there isn’t medium to long term impact or benefit to Sudan, as the signing obviously will help to clear Sudan’s arrears to the World Bank and by doing so it will give Sudan access to over 1 billion in annual from the World Bank for the first time in 17 years.”
Mnuchin said the same thing at Wednesday’s signing ceremony.
“You will be able to use this drawdown, clear the arrears and that will create significant positive opportunities for Sudan,” he said.
Mnuchin is the second high-ranking U.S. official to visit Sudan in recent months, following Secretary of State Mike Pompeo in August. The country was taken off the U.S. state sponsors of terrorism list in December.
Sudanese Justice Minister Nesraldin Abdelbari said Sudan welcomes “the warming up of relations between Israel and countries in the region and also the start of diplomatic relations on our part.”
Once Sudan has access to foreign financing, Salman said, the country can redevelop its agricultural sector, electricity, and infrastructure, which have all deteriorated greatly since the 1990s.
Mnuchin, following Secretary of State Mike Pompeo in August, is the second high-ranking U.S. official to visit Sudan in recent months. In December, the nation was taken off the list of U.S. state sponsors of terrorism.
Sudan’s Minister of Justice, Nesraldin Abdelbari, said Sudan welcomes “the warming of relations between Israel and the region’s countries and also the beginning of diplomatic relations on our part.”
According to Salman, once Sudan has access to foreign financing, the country will redevelop its agricultural, electricity and infrastructure sectors, all of which have deteriorated significantly since the 1990s.