Review of the External Debt Burden in Sudan

Abstract

Sudanese external debts became a chronic problem for the past thirty years. They were first acquired for economic development projects, failed to fulfill that function due to many reasons, economic planning, mismanagement, political turmoil, failure in absorption capacity, corruption…etc. For long periods there were failures in debts repayments and accumulated arrears. Oil discovery did not improve the situation, in fact debts repayments continued to fail and international financial institutions refrained from extending hand to the Sudanese economy even though the country have great potentials and abundant natural resources. Today's debts volume is estimated at more than US$40 billion. The country is downing in stagflation cycles, unemployment their lowest rates as declared by domestic authorities are 26%. Other economists estimate them between 45-70%. Poverty rates and destitution escalated. The current research aims to study relationship between the external debt and economic indicators, exchange rate and GDP in addition to population of Sudan. The analyzed data of External Debt were collected from External Debt Unit-Bank of Sudan. Annual Record and the GDP and exchange rate data were collected from the General Research and Statistics administration Bank of Sudan. The Population Data collected from the Central Bureau of Statistics by using transfer function models. The research is constituted of an introduction about External Debt and the way of data collection was exposed as a total value of External Debt, Economic indicators and number of population. A statistical description of the variables of the study came to some important points as the increase of the total external debt share per capita, and increasing exchange rate of dollar against national currency. Moreover, there were continuous decreases per capita share in GDP. Conclusions are that there are strong correlations between GDP and exchange rate; population and per capita share of external debt. The recommendations are that more statistical studies should be conducted on budget planning and debt services to avoid the commercial credits witch are not used in developing projects. Additionally, loans should be used to invest in social projects in health, education and infrastructures.