When Dominic Raab, the foreign secretary, was in Sudan in January he offered £40m in aid to help its poorest people, who are facing unprecedented food scarcity in a debt-laden country where austerity is deepening. Sudan, ruled by an unelected military-led transitional government after longtime ruler Omar al-Bashir was deposed in 2019, owes the UK almost £900m. But the Observer can reveal that almost 80% of that was accrued from interest, leading to calls for an unconditional debt amnesty. Through what appears reminiscent of a structural adjustment programme, the impoverished north African country, which defaulted on its loans in 1984, is under pressure from lenders to impose austerity measures, including reduced public spending and slashed subsidies, if it wants its spiralling debt cancelled. After Sudan’s previous regime took up the suggestion of the International Monetary Fund to phase out wheat and fuel subsidies to balance its books, there were protests over price rises and deteriorating living conditions, some of which have been violent. Last month Sudan also devalued its currency, a key demand. “We were already struggling to survive, but now life has become impossible,” a student told local media. Seven Sudanese states last month declared a state of emergency following the demonstrations. The IMF said in its 2017 suggestions that “the pain of adjustment on the poor” should be “mitigated via increased targeted cash transfers”, such as the part-UK funded “Sudan Family Support Programme”. Tim Jones, head of policy at the Jubilee Debt Campaign, said that the debt western governments claimed from Sudan was “mostly made up”, as it was based on the addition of up to 12% interest every year for decades. Nick Dearden, director of Global Justice Now, said the UK was among those which had been “a force for more harm than good” following decades of Anglo-Egyptian rule of Sudan until 1956, and criticised how support was dependent on the rolling back of public spending. “It’s really unconscionable that Britain continues to hold these loans as some form of leverage over Sudan’s government today,” he said. “Even worse, Dominic Raab is now offering support to Sudan conditional on the government’s unpopular austerity programme – which threatens to exacerbate poverty and undermine the country’s fragile path to democracy.” The Foreign Office did not respond when asked if any debt writeoff to Sudan would be deducted from the aid budget. Sudan’s government fears hyperinflation amid record inflation. The US removed it from its list of state sponsors of terrorism in December, and has offered it a bridging loan to clear its debt of £940m to the IMF to enable fresh borrowing. Figures released under freedom of information laws show Sudan owes the UK £861m, of which £684m is from interest. Sudan’s minister of finance Jibril Ibrahim said Sudan was going through a difficult process as it put its economy on the “right track” in partnership with its strategic partners. The UK government said it was supporting Sudan’s economic recovery. “That’s why we are not currently pursuing Sudan for its unpaid debts and are committed to agreeing a comprehensive treatment of these instead,” it said.