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Sudan seeks Sh5tr in external debt relief at Paris meet

BUSINESS
By Reuters | May 19th 2021
French President Emmanuel Macron (centre) walks with Sudan's Sovereign Council Chief General Abdel Fattah al-Burhan and Sudan's Prime Minister Abdalla Hamdok before a joint news conference during the International Conference in support of Sudan at the Temporary Grand Palais in Paris. [Reuters]

Sudan is seeking relief on more than $50 billion (Sh5.35 trillion) in external debt, with multilateral and bilateral creditors meeting in Paris in an effort to push the process forward.

Debt relief is a crucial step for Sudan, which sits in a volatile region between the Horn of Africa and North Africa, in its attempts to recover from a deep economic crisis and reenter the global economy after decades of isolation.

Sudan’s debt totals at least Sh5.35 trillion as of the end of 2019, according to the International Monetary Fund (IMF).

The country is still working with its creditors to reconcile its debt up to the end of last year, and officials say the final total could be as high as $60 billion (Sh6.42 trillion).

According to the IMF, $5.6 billion (Sh600 billion) is owed to multilateral organisations including itself, the World Bank, and the African Development Bank (AfDB).

An estimated $19 billion (Sh2.03 trillion) is owed to Paris Club creditors, of whom France, Austria, and the US are the largest.

A similar amount is owed to non-Paris Club countries, including Kuwait, Sudan’s largest creditor at $9.8 billion (Sh1.04 trillion), Saudi Arabia and China.

Finally, Sudan holds what an IMF official says is an unusually high amount of debt to commercial lenders, estimated at almost $6 billion (Sh642 billion). As Sudan was cut off from the international system for decades, about 85 per cent of its debt is arrears - unpaid interest and penalties.

After Sudan’s removal from the US state sponsors of terrorism list in late last year, it became eligible for the Highly Indebted Poor Countries programme, which provides debt relief for low-income nations.

Under the programme, all Sudan’s creditors will agree to restructure and forgive the debt.

 

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