China writes off Sudan debt

China has announced the cancellation of $50 million in Sudanese debt, offering some relief to Khartoum as the country faces a deepening economic crisis caused by years of instability and conflict.

While the debt relief represents a positive gesture, it remains limited compared with the scale of Sudan’s external debt. In July 2022, Sudan’s foreign debt was estimated at around $64 billion, including approximately $4 billion owed to China. Gulf countries remain among Sudan’s largest creditors, although some researchers believe the actual debt burden could be significantly higher, potentially four times the official estimates.

Sudan had secured an agreement to restructure its unsustainable debt in 2021, but the process was suspended following General Abdel Fattah al-Burhan’s military coup in October of that year. Since then, the country’s economic situation has deteriorated sharply due to the ongoing conflict, widespread infrastructure destruction, weakened agricultural production, and soaring inflation.

A Debt Crisis Difficult to Measure

Today, assessing the exact scale of Sudan’s debt has become increasingly difficult. The country’s central bank has not released official debt figures for the past four years, leaving experts with limited visibility over the current financial situation.

Sudan’s main sources of revenue include trade in gum arabic, livestock exports, and especially gold. Gold exports alone generated around $3 billion over the past two years, but this income remains far from sufficient to cover the country’s financial needs and growing deficits.

For economists, the Chinese debt cancellation is unlikely to resolve Sudan’s broader financial challenges. A comprehensive restructuring of the country’s debt, combined with economic recovery measures and political stability, remains essential for rebuilding Sudan’s economy.