New figures show that up to 90 per cent of Sudanese debt owed to the UK is made up of interest. The Jubilee Debt Campaign (JDC) revealed the figures today (31 January).
The news comes shortly after the results of southern Sudan’s referendum. Over 98 per cent of southern Sudanese voters declared support for independence 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 this is interest on original loans. Meanwhile, popular protests in the region have now spread to Khartoum.
"South Sudan should not inherit unjust dictator-debt from the north,” insisted Nick Dearden, Director of JDC, “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.”
In the light of popular protests in Khartoum, Dearden added that 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. They revealed the figures to JDC in response to a question under the Freedom of Information Act.
JDC say 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.
"The UK is claiming Sudan owes £650 million for a debt which may have been as small as £55 million in 1984,” explained Dearden, “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.”
He urged the UK government 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”.