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Sudan’s external debt projected to hit record $46 billion in 2013: IMF

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September 27, 2012 (WASHINGTON) – The International Monetary Fund (IMF) released figures on Thursday projecting that Sudan’s external debts will hit an all-time high next year, the latest evidence of a growing economic crisis engulfing the East African nation.

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Sudan’s new currency sits behind a window at the central bank in Khartoum, Sudan, Sunday July 24, 2011. (AP Photo/Abd Raouf)

Sudan’s external debt are 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.

In its annual review of the Sudanese economy, the IMF Executive board urged Khartoum to "step up their dialogue with creditors and donors to garner support for debt relief".

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 and international and regional financial bodies.

Sudan’s economy was hit hard since the southern part of the country declared independence in July 2011, taking with it about 75% of the country’s oil output.

On Thursday the negotiating teams from the two countries signed an agreement in the Ethiopian capital by which Khartoum will "retain all external debt liabilities". This will be in return for both countries working jointly on reaching out to international creditors to cancel the debt.

Should the two countries fail to secure a commitment from the creditors on debt relief, new negotiations would commence to split up the liability. This is believed to be a thorny issue as Juba asserted in the past that the loans taken by Khartoum were used primarily towards financing military efforts during the north-south civil war.

Several countries such as United States, United Kingdom and Germany expressed readiness to offer debt relief but political conditions attached will likely slow down the materialization of the pledges.

This year Sudan announced that China - a major investor in oil, construction and other sectors of the Sudanese economy - had agreed to extend Sudan’s debt maturity by an extra five years in light of the loss of revenues.

The loss of oil revenue severely curtailed Sudan’s foreign currency inflows putting pressure on the Sudanese pound and pushing inflation rates even higher.

Sudan’s low levels of foreign currency reserves held by the central bank also meant the latter could do little to intervene to support the pound against other currencies.

The IMF is expecting Sudan’s international reserves to drop from $1.3 billion in 2011 to $1.1 billion in 2012 before rising slightly to $1.2 billion in 2013. These levels are enough to cover a little under two months of imports according to IMF calculations.

Sudanese officials traditionally treated the amount of reserves held in foreign currency as a heavily guarded secret refusing to make it public.

In recent months there were news reports attributed to government officials saying that they have received billions of dollars from Arab nations namely Qatar and Libya.

But critics allege that the government intentionally spread the "false" news for the purpose of pushing the price of the dollar on the black market lower as the pound continued to slip.

A year ago, the Bank of Sudan governor called on Arab states to provide up to $4 billion in deposits to shore up the country’s foreign exchange reserves.

The nationwide Forex shortfall hammered the value of the Sudanese pound on the black market, causing it to fall to as low as 6.2 pounds to the dollar last April while the official rate has remained at around 2.7 pounds.

"In order to stabilize the domestic currency and stop the draw-down on the country’s foreign exchange reserves, the authorities introduced various administrative restrictions. These measures were, however, unsuccessful in preventing the depreciation of the exchange rate in the curb market" the IMF said in its assessment of Sudan’s handling of the deteriorating exchange rate.

Authorities in Khartoum decided last May to devalue the pound in a long awaited bid to stabilize the local currency and reverse the chronic shortage in Forex that has plagued the market and frustrated businesses.

However, the devaluation of the pound that was coupled with lifting other restrictions on Forex trade has yet to bear fruit which analysts attribute to the drop in exports and investment levels.

’MORE ECONOMIC REFORMS NEEDED’

The IMF lauded Sudan’s austerity measures which included raising certain taxes, reducing fuel subsidies and cutting non-priority spending but said more is needed to achieve full potential.

"These measures are a positive step towards restoring macroeconomic stability and addressing Sudan’s macroeconomic imbalances. However, reaching fiscal sustainability and enhancing growth potential will require a determined continuation of the reform momentum. Stepping up structural reforms will also help address the underlying structural challenges facing the economy. Key reforms include: (i) a comprehensive civil service reform, (ii) banking sector restructuring, (iii) ambitious privatization program, and (iv) improving governance" the IMF statement said.

The measures triggered a rare but small outburst of protests in the country last summer demanding that the government rollback the new policies.

IMF figures project a sharp drop in revenue to 12.9% of GDP in 2012 compared to 18.7% last year. Expenditures however fell at a slower rate from 20.0% to 16.6% during the same period leaving a negative net balance that is expected to continue throughout 2013.

Last week the Sudanese finance minister complained that the government is facing a number of obstacles in slashing its spending as planned primarily due to non-responsiveness by state governments in adopting the measures and suggested that this may require an intervention by the central government to force compliance.

The government said it would downsize its bureaucracy through a reduction in the number of constitutional post holders in both federal and regional governments from 572 to 318. It also announced elimination of five ministries, mergers between others, sacking of six presidential advisers and reductions in official perks.

The IMF appeared critical of Sudan government for resorting excessively to the banking sector to finance its budget deficits saying it resulted in reserve money growing at 28% and subduing credit to other sectors of the economy.

But today’s agreements signed between Juba and Khartoum could offer a relief to the beleaguered economy since it will allow the landlocked South Sudan to resume oil exports though Sudan, which will provide both ailing economies with desperately needed cash.

Last January South Sudan suspended its entire output of 350,000 barrels a day over a dispute over transit fees.

The former central bank governor Saber Mohamed Al-Hassan said that the deal will provide Khartoum with $2 billion annually and will enhance trade between the two nations.

(ST)

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Kind regards,

The Sudan Tribune editorial team.
  • 28 September 2012 07:52, by Northern Sudanese

    ah these are lies from this website, like normal. so they are now saying that sudan in one year borrowed bilions??? am not saying IMF is lying, am saying Sudan tribune lying about IMF lol

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    • 28 September 2012 07:59, by Akol Liai Mager

      Don’t worry, Mr Zein Abdalla, President, PepsiCo will that debt for you.

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      • 28 September 2012 08:02, by Akol Liai Mager

        Woop!! I meant Mr Zein Abdalla will pay that bebt for you.

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        • 28 September 2012 10:22, by mohammed ali

          Akol, what a morbid & sick mentality! Zain is an individual who has nothing to do with politics. Your hatred is pungent.There are many successful Sudanese all over the world, so go and kill yourself with hatred .Pathetic!

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          • 28 September 2012 14:48, by Akol Liai Mager

            My firend, I do not hate anyone because my DNA is free of hatred otherwise the so-called Arabs Sudan would have not been in Sudan as my ancestors would have stopped or killed the first food’s hunting Arabs. The world knows that Hatred is made in Khartoum by the so-called Awallad Al-Belled. Not-Nafie Ali Not-Nafie says; "Separation of the South is better than the Unity of Garang that will make.....

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            • 28 September 2012 14:56, by Akol Liai Mager

              Not-Nafie Ali Not-Nafie says at Al-Jazeera TV; "Separation of the South is better than Garang’s unity that will give rights to African Sudanese to be Presidents". Atayeb Mustafa, an Uncle of your criminal President killed black Bull to celebrate the separation of the South with his Fugitive Nephews Criminals Bashir and Abderahim. So, you are absolutley sure that I’m innocent for your accusations

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              • 28 September 2012 15:04, by Akol Liai Mager

                The name "Mohamed Ali" reminds all Sudanese & South Sudanese about the dark days of Mohamed Ali’s sons and grandsons Ismail and Daftadar. The genocide committed by Mohamed Ali’s Sons against innocent Sudanese by that time was abeginning of the current genocides being committed by NIF Criminals who are originated from Turkiya. So, your name is a trigger of great sadness caused by your grandfather.

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    • 28 September 2012 08:14, by Hardball

      Northern Sudanese, all the weapons you bought during the war from China and Russia to murder 2.5 million South Sudanese, do you think they were free? To say here someone is lying is not an option. Khartoum was not built the way it is for free either; you better pay that credit Card back as soon as possible.

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    • 28 September 2012 14:00, by South South

      Northern Sudanese,
      You gay Muslim is the one who lies all the time. If you are very sure that ST is lying, why do you read from it ? Yes, Sudan is falling down and that why Sudanese young men are for sell in Liyba.

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  • 28 September 2012 08:41, by George Bol

    Khartoum must show the receipts to the public where they received loan and what for. They have accumulate huge debt from china and Russia for weapons-missiles, tanks, rockets, machine guns and airplane-MIG, Helicopters against the South.
    These Arab are always creating nonsense when they sign agreement. What they sign was not guaranteed so we South Sudanese must be ready for them militarily.

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    • 28 September 2012 11:34, by mohammed ali

      Bol. most of the debt was during Numeri’s time.It is for Paris club and mainly from Arab & western countries.The principal loan is much less than that.It is inflated by interest rates.It is not from China or Russia who are not members of Paris club.Read the article to so your own stupidity before submitting your stupid racial comments!

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      • 28 September 2012 12:03, by zulu

        Stupidity? These are facts that are now hitting sudan so hard and of course the future generartion will pay for it. blaming Nimeiry does not help. the NCP came to power when the loan under Nimeiry was 9bl only. So do you mean to tell us that the rest is only interest and NCP borrowed nothing to purchase MIG 26, and eac costing how much for free?
        It is the NCP that is stupid to wage war than devel

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        • 28 September 2012 17:20, by mohammed ali

          Zulu,as long as there are hate and war mongers like you we certainly be prepaired.Unfortunately stupid pple had to be a lesson again & again, yet they don’t understand.Since 1989 Sudan was not recieving any loan from the west.Other loans after that were not included in the Patis club quota!It is not only in Sudan but all developing countries might have already paid the principal loan several times

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      • 28 September 2012 12:42, by Observer

        M Ali,
        Wrong again. Russia is a member of the Paris Club.

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        • 28 September 2012 17:04, by mohammed ali

          Observer, may be , but it would be a very small loan. Again up to now the loan is for our country, later it will be divided between our country & your country. Be prepaired!

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  • 28 September 2012 08:44, by George Bol

    Abyei and Panthou/heglig -are our lands. Both are receipt of war.Why not we chase them to out of Africa for good.?

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  • 28 September 2012 08:47, by athor deng

    Good for them..I hope they dont say, they are going to share the debt with South Sudan because thats how stupid they are..They can pull something retard like that

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  • 28 September 2012 08:53, by Jalaby

    No worries guys, relief and recovery are underway after we signed the agreement with Jonobean, $1bn out of $3bn will soon stay in our central bank in Khartoum, $11 as oil transition fee will make a big difference, make no mistake that we will never allow thieves in the south to loot the oil that we discovered and then produced without taking our share!

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    • 28 September 2012 09:06, by athor deng

      lol Jalaba. you are the most stupid person I ever ran into..Do you really think that the 3b is going to really help you guys out? Ppl in Blue Nile, Sk and Darfur are starving to death, what are you going to do with them? you are a joke, man

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    • 28 September 2012 09:11, by Jalaby

      Obama will soon lift Sudan from the terror list, world bank will soon loan us, increasing our oil production will soon be real, big dams development and adding more lands for agriculture is expected some time soon!
      Frankly speaking, I start to rethink and believe on Ali Osman Taha speech about "the 7 thriving years that underway"!

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  • 28 September 2012 09:23, by NO PEACE

    YES, we see the money and we also know that they are the one will take our oil very soon.

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  • 28 September 2012 09:58, by forza

    sudan’s debts were 36,5b by the time of referendum,is it the hight interest rate or additional loans that will make it 45.6b by 2013? Sudan was promised that all the debts will be cleared after secession but we came to know that was just a lie by creditors .loans were always a tool made by the west to enslave africa and steal it’s resources.

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    • 28 September 2012 11:23, by mohamed mahgoub

      F. the CPA Wasn’t only about the seperation of the south there were a lot of little details ur govnt ignored& dishonoured the least was when it started the geocide & the scorched earth policy in SK,BN that is when the international community changed their stance towards ur criminal govnt,don’t play innocencent !

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      • 28 September 2012 12:12, by forza

        Mahjoub, the debt relief process was suppose to start immediately after the referendum even before problem in BN&SK start. It shows clearly that intentions was not to clear the debts of Sudan or maybe due to global financial problem creditors decided redeem their money. We don’t play innocent because we had fulfilled our obligations.why are you always happy about issues that impacts negatively?

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        • 28 September 2012 13:33, by solider

          mohamed mahjob;
          you r the one who sould stop playing inncent. SPLM/N is using villegers in SK & BN as human shelds. SPLM/N always operates while they are in the middle of inncent villegers ,thier cowardic tactics worked.SRF stopped its operations just for the safty of the villegers SPLM/N never operate away from the inncents and fight man to man. COWARDS

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          • 28 September 2012 14:39, by mohamed mahgoub

            S.wondering if this is same reason made u kill 300k in Darfur,if the SPLA
            - N was not there u would have wiped those innocent ppl a long time ago as u intended never happened in mankind history agovnt kills its own ppl $ justify it saying they being used as human sheild! what kind of ethics or religious doctorine u follow ,again don’t play naive!

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        • 28 September 2012 14:19, by mohamed mahgoub

          It all over the news that helping Sudan came to a break over Darfur,SK,BN and the criminal behavour of NCP

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          • 28 September 2012 14:53, by solider

            mohamed mahjoub:
            what is the point of genocides in bn &sk just after the separation of sudan. if you still belive in the illusion of the fake genocide blame the nuba as 70% of soldiers in the N army are nuba. it means nuba are eradicating themselves.

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            • 28 September 2012 15:35, by solider

              it also means nuba and foor killed the 2 million janooben in south sudan. soliders from darfoor have high percentage in the N army

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          • 28 September 2012 17:28, by mohammed ali

            Mahjoub, if you feel that you have been cheated or sold out, then it is not the NCP who sold you. Mainly you sold yourself to your real enemies.The enemies of Sudan.If you believe in the so called human rights, democracy, freedom of speech..bla..bla..; then am sorry, I will just feel sorry for you.Human rights for them and to use when they want to weaken us!....con

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      • 28 September 2012 17:40, by mohammed ali

        Mahjoub, you are so naive young man!Who finance these wars for you!We as country suffering to finance these wars. Don’t tell me it is coming from arms captured from SAF, because we don’t even such weapons they are using! Think before using big words like genocide, scorched earth... Colin Powel came Darfur and said loudly " my lawyers are telling me there is no genocide" ...con

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      • 28 September 2012 17:41, by mohammed ali

        Mahjoub, you are so naive young man!Who finance these wars for you!We as country suffering to finance these wars. Don’t tell me it is coming from arms captured from SAF, because we don’t even such weapons they are using! Think before using big words like genocide, scorched earth... Colin Powel came Darfur and said loudly " my lawyers are telling me there is no genocide" ...con

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        • 28 September 2012 17:49, by mohammed ali

          con:two weaks later , in the congress , under pressure from Christian right , he said there is genocide. Did he get revelation from heaven ,suddenly while in the congress? The UN probe said there is no genocide.Have you ever heared anyone about China abuse of human rights after the financial crises.Well, money talks!

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          • 29 September 2012 02:14, by mohamed mahgoub

            M.A look like u sitting on ur ears blind folded by denying the genocide& the crimes commited by ur govnt ,no wonder u don’t beleive in the so called human rights as u called it what is it when agovnt kill its own for nothing but their ethinity or political view which is diferent from urs ,however if Powel said deny that which I doubt ur master confessed but he only argued the number of ppl killed

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            • 29 September 2012 02:51, by mohamed mahgoub

              Con.MA he said less than 10k ! ,there is no way the UN to deny that coz the case was referref by the UNSCthat why he is wanted by ( international justice ) along with his a complices ,China is in top of human rights abuse nobody go after them coz its economic power as u think ,but is that enough to kill ur ppl no man, a crime is acrime ,u can’t steal and tell the judge u did coz ur nieghbour did

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    • 29 September 2012 02:38, by Observer

      Forza,
      We were never promised that the debt would be cleared after secession. If that is what you were told by the NCP well it is your fault for beleiving their lies.
      We were told that there would be discussions with S Sudan about their share of it and that if the CPA was completely adhered to then the IMF would take another look at our debt.
      Go do some research on the internet.

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  • 28 September 2012 10:15, by gorden

    This scene or this article, essay is quite good, it is worth us to appreciate, and can also be used to share public appreciate after, we will get more and more surprise, when we go from the entrance below!If you are hesitated,then will miss a lot of good things from website:
    Nike Blazers Women

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  • 28 September 2012 10:50, by Gabriel KK

    Debt problem is not our problem because we have not touch any money and no single infrastructure or institution established in South Sudan.

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  • 28 September 2012 13:03, by Little Jimmy

    Jallaba, you’re just a little thing that God had brought only to engage people through the net but absolutely knows nothing about your country’s problems.
    sincerely speaking IF your government doesn’t keep off from South Sudan’s affairs, you’ll never be in peace and we will also like you crying on us for mercy. listen dikhead, this is 21st century.

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  • 29 September 2012 09:12, by Nubian King

    The biggest cry is that all these accumulated debts’ burdens were/are used either to purchase outdated weapons/antonovs/MIG from Russia/China OR went into black accounts. What a shame!!!!!!!!!!!!!

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  • 8 February 2013 20:11, by dennishobson

    You should take part in a contest for one of the best blogs on the web. I will recommend this site!
    An interesting discussion is worth comment. I think that deck de piscina deck modular you should write more on this topic, it might not be a taboo

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