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Sudan is Libya’s largest debtor, document shows

February 9, 2011 (KHARTOUM) – Sudan owes more than $1 billion to Libya making it the country’s largest debtor, according to a document obtained by Reuters.

FILE - Sudanese president Omar al-Bashir, right, receives Libyan leader Muammar Gadhafi upon his arrival at the Khartoum International Airport in Khartoum, Sudan, Tuesday, Dec. 21, 2010 (AP)

The document, drafted by Libya’s foreign ministry and presented to the Peoples Congresses, or grassroots lawmaking bodies, says Libya has provided loans to around 40 countries worth a total of $2.197 billion.

As of the end of 2009, Libya had been paid back $1.302 billion, leaving an outstanding balance, when interest is included, of $3.231 billion, it said.

Of that, $1.287 billion, belongs to Sudan though it is not clear when Khartoum acquired that debt.

According to the document, both countries held a meeting in 2009 to resolve the matter but it failed to reach an agreement on repaying the loans.

Sudan is pressing the international community to forgive its $37.8 billion, most of which is owed to the Arab Gulf states of Saudi Arabia and Kuwait.

The issue of national debt is a sticking point between the North and soon-to-secede South with regards to how to divide it among them.

South Sudan insists that it should not bear any of the debt on the grounds that it was not used for any development in the region but was utilized by the North.

However, both sides appear agreed on the need for help by the international community to alleviate the debt burden. So far none of Sudan’s major creditors offered relief.

"We are seeking to have (all of Sudan’s) ... loans forgiven because we believe that both governments, the Government of Sudan and the would-be Government of South Sudan, would not be in a position to repay these loans in the near future," Marial Awour, the Sudanese junior minister of finance, told Reuters.

The British ambassador to the United Nations Mark Lyal Grant in a response to a question today said his government will look for ways it can assist on the issue of debt.

The Obama administration promised similar assistance to reward Sudan for conducting smooth and peaceful referendum.