Sudan will find it difficult to meetscheduled debt repayments over the next five years, Finance
Minister Beshir Omer has told parliament..
    He said Sudan's foreign debt rose to 10.6 billion dlrs at
the end of last year, an increase of 300 mln from 1985.
    Omer said it "will be difficult, if not impossible" for Sudan
to pay a scheduled 4.17 billion dlrs in principal and interest
payments over the next five years.
    He said Sudan had reached agreement with the Soviet Union
and its East European allies to service half of its debts to
them in commodities, with the rest in hard currency.
    Western diplomatic and official sources in Khartoum say 32
pct of Sudan's total foreign debt is to the Soviet Union, the
Eastern bloc and Arab countries.
    Sudan is 450 to 500 mln dlrs in arrears to the
International Monetary Fund (IMF), which last year declared it
ineligible for fresh loans.
    The sources said Sudan, hit by a slump in export earnings
and remittances from expatriate workers, had an annual debt
liability of nearly 900 mln dlrs but set aside only some 200
mln dlrs to service debts in the fiscal year ending next June
30.
    Sudan, its Treasury depleted by nearly four years of civil
war in the south and the aftermath of the devastating 1984-85
drought, has a budget deficit of 2.86 billion pounds this
fiscal year.
    Diplomatic and official sources said Sudan was now only
servicing debts owed to creditors bound by regulations banning
them from extending fresh loans to recipients in arrears.
    They said these included the U.S. Agency for International
Development, the World Bank and its soft loan affiliate, the
International Development Agency.
    Sudan reached a framework rescheduling agreement in 1984
with Western government creditors of the Paris Club.
    The sources said this pact was to have been followed by
bilateral agreements, but fell through when Khartoum became
unable to service debts in 1985.
    A Bank of Sudan (Central Bank) spokesman said last month
Khartoum was negotiating a freeze on interest payments with
commercial banks, owed about two billion dlrs.
    Sudan has not received fresh loans since 1985 and the
sources said it was only getting grants at present. Hopes that
foreign aid would finance 780 mln dlrs  of the 1.14 billion dlr
budget deficit have been dashed, they added.
    Sudanese officials said Prime Minister Sadeq al-Mahdi's
government would shortly announce a four-year economic plan
aimed at starting the country's recovery.
    Details of the plan have not been made public. But the
sources said it would be geared to generate agricultural
exports and would need a substantial injection of fresh loans
that Sudan hoped to receive from Gulf Arab states.
 REUTER
