Sudanese Prime Minister Abdalla Hamdok has said that keeping his country on a US blacklist of state sponsors of terrorism is endangering its path towards democracy, The Financial Times reported.

The designation dates back to 1993, when the country under longtime autocrat Omar Al Bashir become an outcast for having hosted Al Qaeda leader Osama Bin Laden.

In an interview published on Sunday, Hamdok said sanctions linked to the designation were "crippling our economy", adding that Sudan's removal from the list would be a "game changer".

"We are isolated from the world", Hamdok said, noting that Sudan had expelled Bin Laden over two decades ago, and that Bashir's government was overthrown last year.

"Sudanese people have never been terrorists. This was the deeds of the former government," he told the Financial Times.

Concerning speculation that Sudan could normalise ties with Israel if its terror listing were removed, Hamdok said: "We would like to see these two tracks addressed separately."

Last month, Israel signed US-brokered deals to exchange ties with the United Arab Emirates and Bahrain, and the administration of US President Donald Trump wants Sudan to follow suit.

Bashir, wanted by the International Criminal Court (ICC) on charges of genocide and crimes against humanity in Darfur, was convicted of corruption and is currently on trial in the capital Khartoum for the 1989 coup that brought him to power.

Hamdok said he had spoken with the ICC about the option of trying Bashir in Sudan, potentially in a "hybrid court", the paper reported, but that Hamdok considered reforming Sudan's judiciary in order to try Bashir itself would be the best option.

Hamdok also said there were no guarantees that Sudan's democratic transition would hold until elections planned for 2022.

"Transitions are always messy. They are non-linear and they don’t travel in one direction.”

Concerning the country’s tanking economy, the prime minister said a landmark peace deal signed this month with a coalition of rebel groups would result in savings for the government.

Sudan’s economy is in crisis, laid low by long years of civil war under Bashir’s rule, US sanctions and the 2011 secession of the oil-rich south.

The government declared a state of emergency last month to avert a further downturn.

With Sudan no longer a "war economy”, the proportion of revenue spent on the military would drop from up to 80 per cent down to 10-15 per cent, The Financial Times reported him as saying.