Sudan’s transitional government and the United States (US) are poised to reach an agreement for Khartoum to pay hundreds of-millions of dollars in compensation to victims of a 1998 al-Qaeda attack. The terror group bombed the US embassies in Nairobi and Dar es Salaam on 7 August 1998.

The US Supreme Court last week paved the way by ruling that the plaintiffs could claim not only US$5.9-billion in compensatory damages but also US$4.3-billion in punitive damages. US Assistant Secretary of State for African Affairs Tibor Nagy told journalists that ‘we have reached a common understanding with Sudan on the contours of a future bilateral claims agreement.’ It would include compensation related to deaths and injuries of both US and non-US citizens.

Sudan has already shown its intentions by privately settling and paying compensation to the families of the sailors killed in the 2000 suicide bombing of USS Cole in Aden.

At least 213 people died in the Nairobi blast – 44 were US embassy employees: 12 Americans, 32 foreigners. Several thousand people were injured. Twelve people died in the Dar es Salaam blast, none American, and hundreds were injured.

US media quoting official and congressional sources report the settlement would require Sudan to pay around US$300-million – far less than the US$10.2-billion demanded by the plaintiffs. This apparent agreement could clear the way for the US to remove Sudan from its list of State Sponsors of Terrorism – where it has been since 1993.

Delisting would relieve Sudan from a long list of damaging sanctions, including: bans on buying US arms and on US economic aid; a US veto of loans from the International Monetary Fund (IMF) and World Bank; and a prohibition on US citizens engaging in financial transactions with Sudan. Nagy cautioned that removing Sudan from the State Sponsors of Terrorism list was ‘not going to be flipping a switch. It is a process involving several branches of the US government.’

Nevertheless that seems to be the direction relations are heading. And that would have important implications for US-Sudan relations and for Sudan’s national and international identity. It would send the country down a completely different path to the one it’s been on for some 30 years.

Recall that the reason the victims of the 1998 bombings were granted the right to seek compensation from Sudan was because ‘Sudan had knowingly served as a safe haven near the two United States embassies and allowed al-Qaeda to plan and train for the attacks,’ as US District Court Judge John Bates found in 2011.

‘Sudan had provided hundreds of Sudanese passports to al-Qaeda, allowed al-Qaeda operatives to travel over the Sudan-Kenya border without restriction, and permitted the passage of weapons and money to supply al-Qaeda’s cell in Kenya.’ Al-Qaeda leader Osama bin Laden himself then lived in Sudan. In short Sudan’s government was then radically Islamist and behaved accordingly.

Now, with last year’s ousting of Omar al-Bashir –­ the president who gave Al-Qaeda the springboard to attack the US embassies – Sudan seems poised to become an important regional ally of the greatest enemy of the radical Islamists.

Certainly that seems what Washington wants. This deal could convert a mortal enemy into a useful ally – including in the fight against terrorism – in a strategically important neighbourhood, and with a long shore on the Red Sea. And so as Nagy said in that same briefing, ‘the US is hyper-engaged with Sudan’ trying to help the fragile transitional government achieve stability.

The deal isn’t yet done and faces some obstacles. US media have been told that Sudan would pay out US$10-million for each of the American embassy staff killed in the bombings – but only US$800 000 for every non-US embassy employee who died. This has inevitably sparked cries of discrimination. But an anonymous State Department official quoted by the Wall Street Journal defended the deal as the best the non-US plaintiffs were likely to get from impoverished Sudan.

The embattled transitional government would argue that this was the only way for it to shed the crippling US sanctions. And to gain access to badly needed IMF and World Bank loans which could open the door for re-entry into international markets and global respectability.

Judd Devermont, Africa Director of the Center for Strategic and International Studies, says even if the US lifts its block on Sudan’s access to such loans, Sudan will have to pay its arrears before they’ll lend it new money. But ‘Sudan’s willingness to pay shows good faith, especially when the country is suffering economically.’

Indeed. Yet it seems perverse for the US to be demanding so much money from the fragile and impoverished new government of Sudan just as it is trying to help it rebuild. The reply would be that firstly the US administration, bound by law, couldn’t delist Sudan without it first paying compensation. Secondly, there are suggestions that strong US allies in the Middle East, such as the United Arab Emirates and Saudi Arabia, stand ready to put up the money.

Andrews Atta-Asamoah, Head of the ISS’ Africa Peace Security and Governance programme in Addis Ababa, notes that although the putative deal offers immediate benefits for Sudan, ‘the danger is that Sudan seems to be hanging on too much to this de-listing goal. It is not going to be the magic bullet to Sudan’s many economic challenges.’

‘Currently the leaders have something to blame for their struggles. Once this is off the table, they will be exposed to the real pressure that comes with unfulfilled promises and the fact that working with the US is not necessarily all the country requires to address its many challenges.’

He adds that elements of Sudan’s Islamist block and the old guards ‘might not be too happy that the country would be moving too close to the West. That can have implications for anti-reform mobilisation within the country and beyond.’

Senior ISS Researcher Allan Ngari sharply criticises Sudan for taking a ‘cavalier attitude’ to get off sanctions lists and access the IMF and World Bank. ‘State responsibility for acts of terrorism should mean more than such motivations. It’s clear that moral and ethical responsibility on the part of Sudan for the US Embassy bombings in Nairobi and Dar is completely absent.’

Written by Peter Fabricius, ISS Consultant