The people of Southern Sudan are scheduled to vote in a referendum on whether to remain unified with
the central government in Khartoum or break away to form a new, fully independent country. While the
Khartoum government remains committed to a unified Sudan, all indications suggest that the Southern
Sudanese will vote for secession by an overwhelming majority. Khartoum‘s willingness to accept the potential
losses remains unclear. Many suspect that its ultimate actions will depend, at least in part, upon the resolution
of key outstanding issues, such as oil and debt. This paper contributes to ongoing discussions about the role of
Sudan‘s $35 billion in external debt obligations – both for a unified Sudan and a possible Southern secession.
First, it examines Sudan‘s existing debt dynamics and the potential eligibility for traditional debt relief and
multilateral debt relief initiatives. Second, it outlines potential options for dividing Sudan‘s external debt
obligations in the event of a Southern secession. Third, it estimates external indebtedness ratios under each
debt division scenario and the potential relevance of traditional debt relief treatments. Lastly, the paper provides
an indicative roadmap for clearing Sudan‘s loan arrears of $30 billion and potentially securing comprehensive
debt relief in the future.