Sustainability of Sudan External Debt up 2015 and beyond

Abstract Sudan is one of the heavily indebted countries. This study investigates the burden of external debt of Sudan and assesses its future sustainability. By all indicators, Sudan external debt is found to be excessive and unsustainable as up to the end of 2015. With policy reforms aiming at strong sustained economic growth and exports, external debt of Sudan will reach thresholds indicators of sustainability in a medium term. External debt/GDP and external debt/exports of goods and services could well be reduced to match the internationally acceptable ratios given that external indebtedness will grow at lowers rate per annum. Trade openness is good for growth but with rates of increase in exports made higher than rates of increase in imports and imports would be reduced and linked to growth of GDP and the need for contracting new foreign loans. Efforts for benefiting from the HIPCs Initiative should be accelerated. Domestic saving should be enhanced, since in one hand it is much better for economic growth than foreign saving and since it reduces needs for foreign borrowing on the other hand while makes debt more sustainable. There is a high need to attract more non-debt creating financial sources such as FDI, portfolio investments and ODA