October 7, 2016 (KHARTOUM) - Khartoum and Juba on Thursday have agreed to extend the deadline of the “zero option” agreement on the apportionment of debt between the two countries for the second time.
- South Sudanese refugees wait at a border gate in Joda, in the Jableen locality in Sudan’s White Nile State, after arriving from the South Sudanese war zones of Malakal and al-Rank, January 16, 2014. (Photo Reuters/Mohamed Nureldin Abdallah)
Sudan inherited the entire external debt that existed prior to the secession of South Sudan in 2011. Both sides decided to reach out to creditors to obtain debt relief and if that fails will sit down to see how it can be divided using the "zero option".
In September 2012, Sudan and South Sudan signed the “zero option” agreement under which Sudan would retain all the external liabilities after the secession of South Sudan, provided that the international community gave firm commitments to the delivery of debt relief to Sudan within two years. Absent such a commitment, Sudan’s external debt would be apportioned based on a formula to be determined.
In 2014, Juba and Khartoum agreed to extend the “zero option” deadline for another 2 years till October 2016 in order to avoid immediate apportionment of debt between the two countries.
Sudan’s Finance Minister Badr al-Dain Mahmoud met with his South Sudanese counterpart Stephen Dhieu Dau on the sidelines of the annual meetings of the International Monetary Fund (IMF) and World Bank Group (WBG) in Washington on Thursday.
According to the official news agency (SUNA), the two ministers agreed to extend the “zero option” agreement and the work of the joint committees besides the banking correspondence to facilitate the flow of business operations between the two countries.
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 said the debt amounted to about US$45 billion in 2014 (79 percent of GDP), of which about 85 percent was in arrears.
JOINT COMMITTEES MEETING
Meanwhile, Sudan’s Foreign Ministry said the joint committees between Juba and Khartoum would resume its meetings in December.
Sudan’s State Foreign Minister Kamal Ismail said the meetings would discuss the implementation of the agreements signed between the two countries, pointing the meeting would also determine a timetable for the meetings of the various committees according to the concerned technical bodies.
He told SUNA that the meetings of the joint committees shall not be affected by the ongoing war in South Sudan.
In September 2012, both Sudan and South Sudan signed a series of cooperation agreements, which covered oil, citizenship rights, security issues, banking, border trade among others.
In March 2013, the two countries signed an implementation matrix for these cooperation agreements. However, the execution of the agreements didn’t go according to the plan.