North Sudan offers to bear the country’s external debt in return of joining relief initiative
April 17, 2011 (KHARTOUM) – North Sudan has proposed to undertake the country’s entire external debt in exchange for inclusion in an international program providing insolvent countries with debt relief, officials indicated on Sunday.
North and South Sudan, which voted earlier this year to secede in July, agreed last month in Addis Ababa to jointly seek relief of the country’s hefty external debt, which stands at about $35.7 billion, according to official figures.
A report by the IMF last year said that Sudan’s external debt, which dates back to the 1960s when borrowed on poor terms to finance large industrial projects, is projected to reach $37.8 billion this year.
South Sudan’s official, Pagan Amum, told Reuters last month that the south had agreed to assist the north in obtaining debt relief in return for concessions on other pending issues related to post-secession arrangements, including the contested oil-producing region of Abyei.
A delegation from the Sudanese government on Sunday started meetings in New York with the International Monetary Fund (IMF) and the World Bank to explore the possibility of addressing the country’s external debts problem.
Sudan’s minister of finance and national economy, Ali Mahmoud, who heads the delegation, described the talks as successful, adding that the delegation intends to hold bilateral meetings with the Arab group and the World Bank on the sidelines of the meetings.
Meanwhile in Khartoum, the spokesman of Sudan’s Ministry of Foreign Affairs, Khalid Musa, said that the government had gone to the meeting with the option of one side bearing the entire debt in exchange for the IMF’s acceptance to include Sudan in the Heavily Indebted Poor Countries (HIPC).
Musa echoed his country’s complaints that political rifts with the West have prevented Sudan from joining the 40 countries currently under HIPC, which provides them with debt relief and low-interest loans to cancel or reduce external debt repayments to sustainable levels.
However, Musa said that the delegation had “sensed seriousness on the side of the international community in searching for appropriate mechanisms to move forward in relieving the debts in agreement with the creditors.”
The World Bank has said that Khartoum needs to introduce wide economic reforms in order to qualify for relief of multilateral debt.
Former governor of Sudan’s Central Bank, Sabir Mohamed Al-Hassan, announced in statements reported by the daily newspaper Al-Sahafah that north Sudan would not mind bearing the entire external debt if the country’s creditors recognize its inclusion in HIPC.
North Sudan’s economy is facing difficulties manifested in rising inflation and a shortage of foreign currency as it stands to lose billions of dollars as a result of the secession of South Sudan which produces nearly 70 percent of the country’s proven daily output of 500,000 barrels of oil a day
(ST)