Four-fifths of Sudan's £861m Debt to UK is Interest

In January when UK Foreign Secretary, Dominic Raab was in Sudan he offered £40m in aid to help its poorest people, who are facing unprecedented food scarcity in a debt-laden country where austerity is deepening.

After long-time ruler Omar al-Bashir was testified in 2019, Sudan, governed by an unelected military-led interim government, owes Britain nearly £ 900 million in debt. However, Observer revealed that almost 80% of it came from interest, leading to an unconditional demand for debt amnesty.

Through what appears reminiscent of a structural adjustment programme, the poor north African country, which defaulted on its loans in 1984, is under pressure from lenders to impose austerity measures, including reduced public spending and slashed subsidies, if it wants its spiralling debt cancelled.

After the former Sudanese administration accepted the International Monetary Fund’s proposal to phase out wheat and fuel subsidies to balance books, there were protests against rising prices and worsening living conditions, which was violent. Last month Sudan also devalued its currency, a key demand.

“We were already struggling to survive, but now life is impossible,” the student told the local media.Seven states of Sudan Declared last month Emergency after the demonstration.

The IMF, in its 2017 proposal, should “alleviate the pain of poor coordination” by “increasing targeted cash transfers,” like the UK-funded Sudanese Family Assistance Program. Said.

Tim Jones, head of policy for the Jubilee Debt Campaign, said that the debt claimed by the Western government from Sudan was “almost offset” because it was based on decades of additional interest of up to 12% each year.

Director of Global Justice Now, Nick Dearden said Britain was “a force that does more harm than good” after decades of Anglo-Egyptian Sudanese rule until 1956, with public spending on support.

“It’s really unconscionable that Britain continues to hold these loans as some form of leverage over Sudan’s government today,” he said. “Even worse, Dominic Raab is now offering support to Sudan conditional on the government’s unpopular austerity programme – which threatens to exacerbate poverty and undermine the country’s fragile path to democracy.”

The Foreign Ministry did not respond when asked if the amortization of debt to Sudan would be deducted from the aid budget.

The Sudan’s government fears hyperinflation amid record inflation. America removed it from its list of state sponsors of terrorism in December, and has offered it a bridging loan to clear its debt of £940m to the IMF to enable fresh borrowing.

Figures released under freedom of information laws show Sudan owes the UK £861m, of which £684m is from interest.

Sudan’s minister of finance Jibril Ibrahim said Sudan was going through a difficult process as it put its economy on the “right track” in partnership with its strategic partners.

The UK government said it was supporting Sudan’s economic recovery. “That’s why we are not currently pursuing Sudan for its unpaid debts and are committed to agreeing a comprehensive treatment of these instead,” it said.

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March 28, 2021