Sudan’s Public Debt Expected to Reach 128% During Current Fiscal Year
Sudanhorizon – Hala Hamza
The “FocusEconomics” platform has ranked Sudan among the countries most burdened by external debt this year, alongside other countries, most notably Japan, the United States, and Eritrea.
The platform pointed to Sudan’s increasing reliance on external borrowing from countries such as China and other bilateral creditors. It predicted that Sudan’s public debt would reach 128% of its GDP this year.
The platform stated that several factors, stemming from the secession of South Sudan in 2011, have forced Sudan to rely heavily on external borrowing to finance its budget deficit, exacerbating chronic economic instability.
It explained that the debt burden significantly limits fiscal space and restricts investment in vital infrastructure, public services, and economic diversification, thus hindering growth and development.
Banking expert Walid Dalil emphasized the need for Sudan to reduce its external debt, given its location in a volatile region between the Horn of Africa and North Africa, while it attempts to recover from a deep economic crisis and reintegrate into the global economy after decades of isolation.
In a comment to Sudanhorizon regarding the report by FocusEconomics about Sudan’s rising public debt, a source indicated that officials say the final total may reach $60 billion. The source explained that 85% of the debt consists of arrears, unpaid interest, and penalties resulting from Sudan’s decades-long isolation from the international system.
The source added that Sudan was denied access to the HIPC initiative for political reasons, despite meeting all its requirements. The source further explained that the Sudanese government is attempting to address this crisis by resorting to a range of policies and measures, including seeking assistance from the International Monetary Fund.
The evidence confirmed the possibility of the state relying on Gulf deposits, despite these countries not accepting loans and deposits, reaching their peak, which made the support from “the brothers“ become paid for, not only in the form of interest on loans or deposits, but it became in the form of acquiring sovereign assets in exchange for previous deposits and debts.
It suggested diversifying foreign currencies by conducting currency swap agreements that allow the use of the local currencies of the two countries in financing of trade and investments, provided that the prices of those currencies are predetermined at an exchange rate agreed upon by the two sides, without using any other currency in evaluating the exchange rate of the currency.
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