- A key implication of Sudan’s State Sponsor of Terrorism (SST) delisting is the US’s probable support for Sudan’s access to the much-needed IMF credit lines, easing the growing economic and social pressures on the government and reducing non-payment risk, particularly relating to fuel imports.
- Although Sudan’s removal would simplify compliance processes for Western banks, related-party transactions would grow more slowly due to persistence of Darfur targeted sanctions.
- Sudan’s acute economic instability and the resulting risk of popular protests mean that President Omar El Bashir will probably seek to comply with most of the conditions, improving his likely prospects for re-election in 2020.
The US Department of State indicated in a statement released on 7 November that it “is prepared to initiate the process of rescinding Sudan’s designation as a State Sponsor of Terrorism”.
Sudan has been listed as a state sponsor of terrorism since 1993 over allegations of harbouring jihadist militants. The initiation of delisting discussions follows the United States’ decision to lift broader economic sanctions on the country in October 2017, which allowed foreign and US businesses to invest and operate in Sudan.
Sudan’s continued designation as an SST has, however, blocked US foreign assistance and limited its ability to gain US support in accessing credit facilities from multilateral lenders such as the International Monetary Fund (IMF). Furthermore, despite the US’s 2017 decision to lift broader economic sanctions on the country, Sudan’s SST designation has provided a continued disincentive for private economic engagement with the country, with several historical cases involving foreign firms breaching sanctions and paying significant penalties. For instance, French bank BNP Paribas was fined USD140 million in 2014. This has meant a continuation of Sudan’s acute economic instability, including high consumer price inflation, with IHS Markit estimates at 62% for 2018, as well as insufficient foreign currency reserves, which are most probably below the IMF’s benchmark of three months’ import cover.
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