The World Bank and the US Treasury Department announced on Friday that Sudan had settled its debts with the World Bank after nearly three decades, bringing the heavily indebted African country closer to a much-needed international debt-relief package.

Sudan now has access to nearly $2 billion in grants from the World Bank's International Development Association, according to World Bank President David Malpass (IDA). The Sudanese government announced that $635 million would be made available immediately for budget funding and government expenditure.

The arrears were cleared. Thanks to a $1.15 billion loan guarantee from the US government, which dated back to the time of former autocrat Omar al-Bashir. Sudan's Finance Minister, Jibril Ibrahim, said that clearing the arrears would enable the country to receive funding from the World Bank Group and other multilateral institutions, allowing it to move ahead with transformative development projects.

“We appreciate the US government's assistance in speeding up this clearance process, which supported our efforts to achieve more comprehensive debt relief,” Ibrahim said.

According to US Treasury Secretary Janet Yellen, Sudan deserves credit for introducing a "robust economic reform program" that underpins the country's transition to democratic rule after three decades of international isolation. The United States is pleased to contribute to these efforts today by assisting Sudan in paying its World Bank debts. Sudan will be one step closer to obtaining much-needed debt relief as a result of this decision, which will aid the country's rehabilitation into the international financial community.

After the overthrow of al-Bashir in April 2019, Sudan's civilian-led transitional government took power, ending years of global isolation.

The country is seeking debt relief from foreign financial institutions, official bilateral creditors, and private creditors totaling $56 billion. Approximately 85% of that is overdue.

Sudan owes around $2.8 billion to the World Bank, IMF, and African Development Bank; $19 billion to countries in the Paris Club of official bilateral creditors; $21 billion to non-Paris Club members; and the remainder to private creditors.

Sudan has made significant progress with the IMF on a staff-monitored program, but the country's economy remains "highly weak," with inflation reaching 300 percent and basic goods shortages, according to the IMF.

Sudan is getting closer to the first step of a larger debt relief package under the Heavily Indebted Poor Countries (HIPC) initiative, which could happen as early as mid-2021, as informed to the Reuters news agency.

After Sudan was removed from the US's "state sponsor of terrorism" list in late December, the US loan revealed on Friday had been in the works for a long time.

Sudan took measures in February to consolidate its official and black-market exchange rates, fulfilling one of the key conditions requested by international donors.

Sudan has completed a massive amount of reform in a short period. This included difficult measures including the elimination of gasoline subsidies. Electricity, diesel, and bread have all risen in price in Sudan in recent months as product shortages continue or worsen.

Sudan's cabinet declared, "This triumph belongs to the Sudanese people who have borne the burden of economic reforms, that have been difficult because of the COVID-19 pandemic."