Home | News    Sunday 19 February 2012

Sudan formally notified by US on debt relief plan & Abyei proposal

February 18, 2012 (KHARTOUM) – The Sudanese minister of finance and national economy Ali Mahmood confirmed that Khartoum received a formal notification from the United States (US) on its proposal submitted as part of the 2013 budget to cancel all of the country’s $2.4 billion debt.

JPEG - 27.5 kb
Sudan’s Finance and National Economy Minister Ali Mahmood (AFP)

This week, US President Barrack Obama submitted his 2013 budget proposal to Congress which included an allocation for debt relief if Sudan fulfils conditions including full implementation of 2005 Comprehensive Peace Agreement (CPA) and adhering to legislative requirements on human rights and fighting terrorism.

But the Sudanese official speaking at a forum in Khartoum said that these conditions are "tough" particularly with regards to border demarcation between north and South Sudan which he said will take a long time, as well as resolving the “complicated” impasse over Abyei.

He also revealed that China has extended the maturity of its debt to Sudan for another five years upon Khartoum’s request.

Mahmood complained that Sudan pays $600 million in debt repayments to Arab sovereign funds which he said is a tiny fraction of the $37 billion in overall external debts with interest.

He nonetheless said that Sudan exported 7.2 tonnes of gold at the price of $55 million per ton.

Since the oil rich South seceded last July, Sudan lost its main foreign currency source causing a steep drop in the exchange rate of the Sudanese pound against the major currencies. At one point the dollar traded for 5.2 Sudanese pounds which is almost twice the official rate of 2.7 Sudanese pounds.

Sudan and South Sudan have yet to agree on splitting up the national debt. Southern Sudanese officials have in the past said that they will not accept a share in the country’s foreign debts, stressing that the money was borrowed to finance the northern army to fight Southerners in the civil war.

Most of Sudan’s debt dates back to the days of president Ja’afar Nimeiri. It grew from $9 billion in 1985 to approximately $38 billion. The majority of it is owed to the Arab Gulf States of Saudi Arabia and Kuwait.

So far Sudan’s efforts to have the debt cancelled has met little success amid a world economic crisis and western countries attaching political conditions to debt relief.


Mahmood also disclosed that the government received a letter from US special envoy to Sudan, Princeton Lyman, saying that Washington asked the government of South Sudan to agree to conducting the long delayed referendum in Abyei next August, when the Arab Misseriya nomads are in the area.

Residents of the border region of Abyei were supposed to vote more than a year ago in a plebiscite on whether they want to be with the north or join what is now the independent state of South Sudan. However the disagreement between Khartoum and Juba on who is eligible to vote led to the suspension of the process.

The Sudan People’s Liberation Movement (SPLM), that governs South Sudan assert that only the Southern-aligned Dinka Ngok should be allowed to vote, while the Khartoum-based National Congress Party (NCP) have insisted that the nomadic Misseriya group, who enter the region for a few months each year to find grazing land for their cattle, should also be given full voting rights.

Mahmood said he will meet with a visiting US official today in Khartoum.