AFRICANGLOBE – The Sudanese government today announced that African efforts to seek debt relief on behalf of Khartoum have all but collapsed. The Undersecretary of the Ministry of Finance Youssef Hussein said today that the African bloc failed to find solutions but vowed to continue efforts in this regard and keep the issue alive in the international arena.
The official did not elaborate on what prevented Africa from securing any debt cancellation pledges for Sudan from creditors.
Sudan’s external debt is estimated to have grown by 27% since 2008 from $32.6 billion to $41.4 billion in 2011. The IMF forecast that the debt level will reach $43.7 billion in 2012 and $45.6 billion in 2013. The latter represents 83% of Sudan’s 2011 GDP, which was $55.1 billion.
The government in Khartoum insists that it has satisfied all technical requirements for debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative.
According to the International Monetary Fund (IMF) website, the country seeking relief under HIPC must meet certain criteria including having an unsustainable debt burden, having a track record of reform and sound policies through the International Monetary Fund (IMF) and World Bank supported programs, developing a Poverty Reduction Strategy Paper (PRSP) through a broad-based participatory process in the country.
At a press conference in Khartoum on the sidelines of an African economic conference, Hussein claimed that Sudan could not benefit from HIPC for political reasons and noted that more than 70% of the country’s debt is a result of interest accumulation over the years.
He acknowledged that lack of access to concessionary loans has hampered development in Sudan, but pointed out that the Arab sovereign funds that have partially filled the gap.
The Sudanese official said that his country’s chairmanship of the African bloc at the IMF gave it a better opportunity to bring up the debt issue and receive technical assistance to raise the efficiency of institutions and human resources especially in the field of “real production”.
Last April, the deputy director of the Middle East and Central Asia department at the IMF Edward Gemayel warned that it will be near impossible for Sudan to secure debt relief even if it satisfied technical and economic requirements.
Gemayel who led an IMF’s delegation to Khartoum went on to say that Sudan will not be able to benefit from the HIPC initiative despite fulfilling its conditions unless it succeeds in convincing all 55 members of the Paris Club creditor nations whom he said have the power to slash 67% of conventional debt owed by Sudan.
This he said, was not just impossible but improbable.
Around three quarters of Sudan’s external debt are owed to the Paris Club of creditor nations and other non-member states. The remaining balance is equally divided between commercial banks as well as international and regional financial bodies.