Is it permissible to give cash zakat to settle the debts of a friend living in Sudan, knowing that the creditors are merchants and he also owes me money?

There is no objection to the creditor giving his debtor zakat to settle debts owed to someone other than the zakat payer, or for the indebted person (gharim) to settle his debt owed to the zakat payer, provided that the zakat payer hands over the money and does not stipulate that it be returned to him for the debt. It is not permissible for the zakat payer to absolve the debtor of his debt, nor to give him the money on condition that it be returned to him. However, if they intended that and did not stipulate it, it is permissible. It is obligatory to avoid collusion and agreement that the money be returned for his debt. This is not permissible if the intention is to benefit the zakat payer or to recover his debt. Rather, it is permissible if the zakat payer intends to benefit the indebted person without relinquishing a financial right for himself. It is permissible to transfer zakat from one country to another for a predominant benefit, such as the presence of relatives among the recipients of zakat or a country in greater need.