Experts Mull Solutions For Sudan’s Huge Debt
25 August, 2019
KHARTOUM (Sudanow) - As the Sudan anticipates the formation of the interim civilian government for the coming three years, the worry is now how to overcome the hoard of impediments facing the country’s economy.
One of these hurdles is the Sudan’s inability to reach out for foreign loans because of the big debt and the failure to repay the country’s economic partners.
This failure to pay the outstanding debts has reduced Sudan’s rating in the scale of international credit classification drawn by specialized trade agencies to determine a certain country’s eligibility to obtain loans.
What complicates the debt crisis is the country’s inability to pay debt installments. Sudan’s debt situation is still critical. According to the latest official statistics, Sudan’s debt amounts to $ 58 billion, including interests. Most of this debt is because of repayment defaults and the accumulating interests.
International financing agencies indicate Sudan’s inability to continue to bear the debt burden. They have called upon Sudan to adopt sound economic policies, to keep to rally necessary support for its plea for debt reduction and to cut on hard money loans.
The settlement of external debt requires more support for the new government’s strategy for economic reform.
Some economic experts are presenting solutions and recommendations that can help tackle the issue of external debt, given the critical juncture Sudan is passing through at the moment and the need for international assistance:
Economic expert Ibrahim Ahmed Albadawi said Sudan’s external debt constitutes “a heavy burden on the economy and an obstacle for sustainable development and for investing in infrastructures.”
“The accumulation of external debt was because of the previous regime’s inability to negotiate with the lending groups (international financing agencies and the Paris Club) on debt relief due to issues related to Sudan’s external relations and the Darfur question,” he said.
Badawi added that Sudan, under natural international relations, can benefit from the debt relief initiative for heavily indebted poor countries (HIPC) that reduces external debt to less than 20%. “Restructuring the economy, debt relief and the conclusion of a financing agreement with international institutions is sure to largely increase foreign investments,” he said.
Economist Mohammed Alnayir considered Sudan’s external debt “an intricate problem”. He said “Creditors’ pressure can impede the economy,”.
He hoped the recent agreement between the Transitional Military Council (TMC) and the opposition Forces of the Declaration of the Forces of Freedom and Change (FDFC) and the shift to a civilian government to be followed by an elected government could lead to the lifting of Sudan’s name from the list of countries the US considers sponsors of international terrorism. Such a development can give a positive signal that could allow the World Bank and the International Monetary Fund to adopt debt relief for Sudan, he said.
Dr. Nayir maintained that it is possible for Sudan to benefit from the initiative for debt relief for heavily indebted countries and obtain complete debt relief.
“This requires big movements from official and popular diplomacies as well as strenuous effort from the coming economic team to engage the international community in this respect,” he said.
“The coming government has a tough task ahead for engaging the international financing institutions in a bid to benefit from possible funding avenues to obtain easy loans. That is indeed a big challenge for the coming government,” he said.
Dr. Abubakr Altijani Alhaj, an economic expert in the UNDP, has called for the need to concentrate on the role of regional and international diplomacy in writing off or rescheduling Sudan’s debts, and to inform debtors about the realities of the corruption of the defunct regime and its failure to use loans for development and for the benefit of the people a matter that led to the decline in infrastructures and services and the hiking inflation rates, scarcity in cash and commodities.
He called upon the country’s economists to explain how loans and grants were mismanaged during the previous regime. "Active diplomacy is the way out of the external debt quagmire, taking into consideration that Sudan hosts a vast number of refugees, guards the most important routes for human trafficking and contributes to the combat of terrorism,” he said, lamenting the fact that funds received for these activities were not used to benefit the economy. “All these are good reasons that can pave the way for debt relief,” he said.
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