South Sudan should not be saddled with inflated unjust debts

New figures reveal that up-to 90 per cent of Sudanese debt owed to the UK is interest

The people of South Sudan have voted to secede from the north. Over the next few months negotiations will take place on what to do with Sudan’s debt of $35 billion, $20 billion of which is interest on original loans.[1] Meanwhile, popular protests in the region have now spread to Khartoum.

Nick Dearden, Director of Jubilee Debt Campaign said: 

“South Sudan should not inherit unjust dictator debt from the north. Current debt relief processes are not acceptable – they will simply force south Sudan into a time consuming programme, full of illegitimate conditions, which allows borrowers to collect interest on deeply unjust debts. Moreover, as popular protests reach Khartoum, the debts of the northern government also need to be audited to identify past unjust lending and increase transparency.”

The UK claims Sudan owes £650 million ($1 billion) to the Export Credit Guarantees Department, but does not say what projects loans originally supported. This debt originates from before 1980. Since 1984 an interest rate of between 10 and 12 per cent has been charged on the debt, wildly inflating it.[2]

Nick Dearden, Director of Jubilee Debt Campaign said:

“The UK is claiming Sudan owes £650 million for a debt which may have been as small as £55 million in 1984. If this debt is cancelled the UK will call the whole amount aid, and use it to meet aid targets. Yet the debt is made-up money based on ridiculously high interest rates. The UK government needs to conduct an audit of all debts owed by developing countries to reveal if loans damaged human rights, development or the environment, and to expose usurious interest rates.”


Contact: Tim Jones, +44 (0)20 7324 4722


[1] World Bank and IMF. (2010). Sudan: Joint IMF/World Bank 2009 debt sustainability analysis. IDA and IMF. 07/06/10.

[2] ECGD. (2011). Response to Freedom of Information Request. ECGD. 07/01/11.

Sudan is eligible for the IMF and World Bank Heavily Indebted Poor Countries (HIPC) programme, but has not started the process of getting debt relief. The HIPC process takes several years, requires countries to make debt repayments in the meantime, leads to new loans and debts being created, and gives the two Washington-based institutions unprecedented control over a country’s economic policies.

The UK does not require debt repayments from a country eligible for HIPC, but keeps charging interest on debt until it is cancelled. When it is cancelled, all the claimed amount cancelled is counted as aid and contributes to meeting UK aid targets. Whilst Sudan is eligible for HIPC, neither new state of North or South Sudan may be eligible. It is therefore unclear what the UK would do with any debt inherited by South Sudan.


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