The risk of a prolonged conflict in Sudan is credit negative for its neighbouring countries and multilateral development banks (MDBs) with loan exposures to the north African country, Moody's Investors Service said in a note on Monday. "If the conflict descends into a prolonged civil war, destruction of social and physical infrastructure would have lasting economic consequences, weighing on MDB asset quality in Sudan, along with overall non-performing loans (NPLs) and liquidity." Of the banks, Trade and Development Bank (TDB) had loans worth $931 million in Sudan as of the end of December 2022. The vast majority (95%) of this exposure is in the form of trade finance facilities previously used to fund food and fuel imports. Afreximbank had 2.4% of development-rated assets in Sudan as of the end of 2021, though this exposure is mitigated via a tailored cotton receivables-backed structure.

Source: The North Africa Journal April 24, 2023 09:55 UTC