China waives $50 million Sudan loan to ease economic strain

China and Sudan Sign Waiver on $50m Loan Amid Ongoing Conflict

A protocol signed by both countries in Port Sudan has waived four interest-free loans worth 344 million yuan, approximately $50m, with immediate effect. The agreement comes amid the ongoing war between Sudan’s army and the Rapid Support Forces, which has significantly impacted the country’s economy.

According to the United Nations, the conflict has reduced Sudan’s economy by roughly 40 percent. The country’s external debt, estimated at over $56bn before the war, is expected to have increased since. China’s relationship with Sudan predates the war and was built on oil and infrastructure interests that survived multiple changes of government.

The waiver was announced as Sudan’s military-led government seeks financial support amid Western sanctions. China has continued investing in the country throughout the war, while Western governments, including the United States and European Union members, have largely held back.

Sudan’s Finance Minister Gibril Ibrahim welcomed the move, stating that China has continued to invest in the country despite the conflict. China’s charge d’affaires in Sudan, Xu Jian, also expressed China’s readiness to help rebuild what was destroyed during the war.

The $50m debt relief amounts to less than 1 percent of the total external pre-war debt. However, it comes at a significant moment for Sudan, which is now in its third year of conflict. The war has resulted in over 1.5 million deaths and displaced approximately 14 million people.

China’s decision to waive the loan is part of its broader approach to providing interest-free loan forgiveness as a diplomatic gesture to multiple countries. This approach has helped cement China’s position as Africa’s largest trading partner for 17 consecutive years.

Source: Al Jazeera