April 16, 2013 (KHARTOUM) – The Sudanese minister of finance Badr Al-Deen Mahmood reiterated that his country has completed all technical prerequisites of debt cancellation especially in relation to the short-term program, which was agreed upon with the International Monetary Fund (IMF) as one of the requirements.
Mahmood, who made the statements after returning from Washington where he participated in a technical committee meeting on Sudan’s debt, also revealed that they received "mezzanine financing" that was earmarked for three countries including Sudan, Zimbabwe and Somalia.
This form of financing will be used to reduce outstanding commercial loans, the minister added. He also underscored the need for reaching out to creditors in the coming period, particularly Paris Club in order to start practical steps for debt relief.
He said that during those meetings they reviewed a strategy paper on poverty eradication projects by providing basic services including education, health and projects to support poor families along with other social projects.
Mahmood also mentioned that he held numerous meetings on the sidelines of the spring meetings of the IMF and the World Bank Group (WBG) including officials from the US treasury.
Last year, the IMF said that Sudan’s debt will hit $44.7 billion in 2013 which amounts to 87.6% of its Gross Domestic Product (GDP). It urged Sudan at the time to work with South Sudan on the issue of debt that existed under the pre-secession Sudan, which has currently been inherited by Khartoum.
"In light of Sudan’s large stock of overdue external debt obligations, the government should work closely with South Sudan as part of the recently signed comprehensive agreement on reaching out to creditors to elicit their support for comprehensive debt relief, given the approaching deadline of the ‘zero option’ for debt apportionment," the IMF said last year.
Sudan and South Sudan agreed to work jointly on seeking debt relief from international creditors. If these efforts are unsuccessful the ex-foes will sit down again to decide on how to split the debt.
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.
A year ago, an IMF official said that it will be near impossible for Sudan to secure debt relief even if it satisfied technical and economic requirements.
"I’m not saying this is impossible but it is difficult because it is linked to political issues which requires a public relations effort with member countries” IMF deputy director of the Middle East and Central Asia department Edward Gemayel said during a visit to Khartoum.
He pointed out that any debt relief deal with Sudan would require the unanimous consent of all 55 countries in Paris Club which he suggested would be improbable.