United States signs $1.2bn loan deal with Sudan

Sudan on Wednesday signed a short-term loan with the United States of $1.2bn and signed another pact to normalise relations with Israel.

Justice Minister Nasredeen Abdulbari signed the deal with visiting US Treasury Secretary Steven Mnuchin, according to the prime minister’s office.

It is the first visit to Sudan by Munchin after the US removed the country from its list of "state sponsors of terrorism" last month.

“This is a very, very significant agreement," Mnuchin said in comments carried on the state-run SUNA news agency.

"It would have a tremendous impact on the people of Israel and the people of Sudan as they continue to work together on cultural and economic opportunities and trade.” 

Meanwhile, Abdulbari said he welcomed “the rapprochement that took place between Israel and the countries in the region, as well as the beginning of diplomatic relations," which he said, "we will work, form our side in the near future, to strengthen and expand them in the interest of Sudan and in the interest of other countries in the region.”

Sudan's economic recovery

Sudan’s Acting Minister of Finance Hiba Ahmed and Mnuchin also “signed a memorandum of understanding in Khartoum to provide a same-day bridge financing facility to clear Sudan’s arrears to the World Bank”, her office said in a statement.

“This move will enable Sudan to regain access to over $1 billion in annual financing from the World Bank for the first time in 27 years,” the statement added.

Sudan has more than $60 billion in foreign debt.

Up until December 14, Sudan was on the US's list of state sponsors of terrorism, meaning it was precluded from receiving American aid or defense deals and from engaging with US-dominated lending institutions such as the World Bank and the International Monetary Fund.

In return for its removal from the terrorism list, Sudan's transitional government pledged to normalise relations with Israel, which comes as part of the Trump administration's last-minute plan to improve relations between Israel and Arab nations.

The US has announced diplomatic normalisations between Israel and the United Arab Emirates and Bahrain — the first since Jordan recognized Israel in the 1990s and Egypt in the 1970s. Morocco also established diplomatic ties with Israel.