Four-fifths of Sudan’s £ 861million UK debt is interest | Sudan
When Dominic Raab, the Foreign Secretary, was in Sudan in January, he offered £ 40million in aid to help his poorest people, who face an unprecedented food shortage in an indebted country where l austerity is intensifying.
Sudan, led by an unelected, military-led transitional government following the impeachment of longtime leader Omar al-Bashir in 2019, owes the UK nearly £ 900million. But the Observer can reveal that almost 80% of this came from interest, which led to the request for an unconditional debt amnesty.
Through what seems to suggest a structural adjustment program, the impoverished North African country, which defaulted on its loans in 1984, is under pressure from lenders to impose austerity measures, including a cutting public spending and subsidies, if he wants his spiraling debt canceled.
After the former Sudanese regime accepted the International Monetary Fund’s suggestion to phase out subsidies on wheat and fuel to balance its books, there were protests against rising prices and deteriorating living conditions, including some were violent. Last month, Sudan also devalued its currency, a key demand.
“We were already struggling to survive, but now life has become impossible,” a student told local media. Seven Sudanese states declared a state of emergency in the wake of the protests last month.
The IMF said in its 2017 suggestions that “the adjustment pain for the poor” should be “alleviated by an increase in targeted remittances”, such as the “Sudan Family Support Program” funded in part by the United Kingdom.
Tim Jones, head of policy at the Jubilee Debt Campaign, said the debt Western governments demanded from Sudan was “mostly constituted” because it was based on adding interest of up to 12% each year for periods of time. decades.
Nick Dearden, director of Global Justice Now, said the UK was among those who had been “a force for more harm than good” after decades of Anglo-Egyptian rule over Sudan until 1956, and criticized the way support depended on the decline in public spending.
“It is truly unreasonable that Britain continues to hold these loans as a form of influence over the Sudanese government today,” he said. Worse yet, Dominic Raab is now offering support to Sudan subject to the government’s unpopular austerity program – which threatens to exacerbate poverty and undermine the country’s fragile path to democracy.
The Foreign Ministry did not respond when asked if a cancellation of debt to Sudan would be deducted from the aid budget.
The Sudanese government fears hyperinflation amid record inflation. The United States removed it from its list of terrorist sponsoring states in December and offered it a bridging loan to forgive its £ 940million debt to the IMF to allow for new borrowing.
Figures released under freedom of information laws show that Sudan owes the UK £ 861million, including £ 684million in interest.
Sudanese Finance Minister 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 British government has said it supports Sudan’s economic recovery. “That is why we are not currently suing Sudan for its unpaid debts and we are committed to agreeing a comprehensive treatment of them instead,” he said.