Home | News    Thursday 11 November 2010

Sudan hoping for flow of foreign investments after referendum, 2011 budget approved

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November 10, 2010 (KHARTOUM) – The Sudanese parliament today approved the 2011 budget as the country moves towards a likely breakup of Africa’s largest country into North and South in the self-determination referendum due to take place in early January of next year.

Sudan’s official news agency (SUNA) quoted finance and national economy minister Ali Mahmood Hassanein as saying that the enacted budget focused on increasing production and supporting the agricultural and industrial sectors. He also said that the goal is to boost livestock imports and bring inflation to below 12%.

The GDP should also grow at a 5% rate while preserving the exchange rate, Hassanein added.

Oil exports represent 65% of revenue for Sudan and helped fuel its unprecedented economic growth despite US economic sanctions imposed since 1997.

However, fluctuations in crude prices particularly during the global financial crisis in 2008 created a shock in the Sudanese economy and forced the government to increase taxes in order compensate for lost revenue.

The Sudanese official noted that oil output is projected to be between 480,000 and 500,000 barrels per day (bpd) at about $60 a barrel. The budget deficit will account for 3.2 percent of economic output and will be financed through the sale of Islamic bonds and external borrowing. No new taxes have been introduced however.

Hassanein stressed that should South Sudan secede following the referendum there will be no economic collapse in the North given the established infrastructure and other non-petroleum sources of revenue such as gold, agriculture and livestock.

The governor of the Sudan central bank Sabir Mohamed Al-Hassan on his end echoed the sentiment saying that there are contingency plans in place for this scenario.

"They will not be worse than the shock of the [global] financial crisis," Al-Hassan said. He reiterated that even though most of the oil reserves lie in the South, the infrastructure for the petroleum industry is in the north which requires cooperation of the two sides for mutual benefit.

He also predicted resumption of foreign investment into the country after the political uncertainty is over.

“We expect after the referendum that foreign direct investment will resume,” Al-Hassan told Bloomberg. Currently, it’s “almost halted because of political uncertainties,” he said.

Sudan will soon pass legislation easing conditions for foreign investors, President Omer Hassan Al-Bashir told parliament on Oct. 12. The country expects more than $3 billion of foreign investment in non-oil industries next year, up from $2 billion in 2010, Hassanein said today.

Both officials did not address the chronic shortage in hard currency which caused deterioration in the exchange rate of the Sudanese pound in recent months. The central bank has failed to inject enough forex into the market to bring the price on the black market in line with the official one.

Sudanese authorities blamed the crisis on unfounded rumors that the economy would collapse following South’s separation. Many Sudanese say they have moved money into foreign currency and stashed it at home ahead of the independence vote.

The government introduced a set of measures last September that bans certain imports while increasing tax and duties on others to reduce the outflow of hard currency.

In 2011 the people of South Sudan will vote in a self determination referendum in order to decide whether they want to remain as part of united Sudan or create their own state. It is widely expected that secession will be the overwhelming choice of Southerners.

The separation of Sudan into a two states will deny the North billions of dollars in revenue generating from vast oilfields in the south of the country. Currently the North and the South are splitting the proceeds of crude in accordance with the Comprehensive Peace Agreement (CPA) signed in 2005.

About 75 per cent of Sudan’s proven reserves of 6.3bn barrels are in the south but the pipeline that carries the oil to export terminals and refineries runs through the north. The south needs Khartoum’s co-operation to sell its oil; the north needs revenues from its neighbor’s resources.

(ST)

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  • 11 November 2010 06:52, by Deng Thiak Adut

    Hopes is for the weak!! What I know is that no foreign nations will see Northern Sudan fit for business or investment after referendum. There is nothing there to invest in. Nothing whatsoever.....
    So keep your hopes on!!

    repondre message

    • 11 November 2010 07:31, by Anyang

      It’s obvious that, the sole investor will be fraction of radicals from Arabs world like Iran ..........etc. Otherwise it will be a miracles to see the flows of NONE of they Arabs nation into Sudan.

      repondre message

      • 11 November 2010 07:59, by Deng Thiak Adut

        I am very please to put forward to Honourable Kiir Marydit and Riek Machar that finally the Government of Sudan had deceived Southerners from very beginning and the general public now realised that from very beginning. In this article, the NCP official had admitted their deceits in the following statement from this article; please note "the Sudanese official noted that oil output is projected to be between 480,000 and 500,000 barrels per day (bpd) at about $60 a barrel". This statement was made in reference to the actual out and the price it is being sold in the international market but the share of oil is not been indicated. The share of oil revenue was never 50% of the $60 a barrel rather on $12 a barrel. Again, there was so many irregularities about sharing being 27% not 50%. Even if it was 50%, it would be 50% of $12 a barrel.
        I believe that initially, the so called transparency budget shows that a barrel of crude oil was priced at $12 a barrel. And suddenly, the stated in this article that it cost "about $60 per a barrel". This big difference and someone may need to verify this source.

        There is good cause of action for misleading in relation equal shares pursuant to CPA. Secondly, Mr Lual Achiek keep bragging or pushing for increasing oil productions; for whose bloody benefit? I don’t understand? Many of the idiots like Lual himself, Bona and so forth, who never held guns to bloody jalaba’s head, got educated overseas and now got opportunity to talk about affairs of Southern Sudan should be held criminal accountable for assessing, abetting, procuring the act of deception by NCP. I hope Kiir read this article and at least show interest.

        repondre message

  • 11 November 2010 07:34, by mayom maboung marek

    A drowning man will clutch at a straw.

    repondre message

  • 11 November 2010 08:15, by okucu pa lotinokwan

    Dear Southerners.

    The truth are coming out,see the current calculation the Arabs are doing in their budgeting if we the south separated ,soon or later we will be the Boss to the Arabs,the unity the Arabs are crying for is because they want to benefit from our Oil(petrolum).
    And my advice to the youth of today stand strong fit in every thing you will enjoy soon, for the case of Abyei no one should get worried, Abyei will come back to the south by force or by degree as it was taken in 1905.

    OKUCU PA LOTINOKWAN

    repondre message

    • 11 November 2010 08:31, by Young Nation

      What stupid gangs of NCP so called members of parliment. Don’t they see or sense the the seriousness of Sudan’s separartion into North and South? What a waste of time and words in the so called Sudan’s parliment?

      Young Nation is a Student of IR at The University Of Queensland, Australia

      repondre message

  • 11 November 2010 10:40, by Akuma

    I think Northern Sudan will have that;

    Hope will be for Al-shabbab from Somalia,
    Hope for Al-qaeda from Middle East,
    Hope for Sanctions from United state of America
    Hope for Southern Sudan government as a nation for peace and freedom

    Dr. Akuma

    repondre message

  • 11 November 2010 23:01, by Lok T Simon

    Keep calculating whatever you want to calculate now mr Bashir’s group, but your calculation on screen of your calculator will stop functioning on 9th January, 2011.

    Thanks

    Lok T. Simon.

    repondre message

  • 25 March 2013 13:59, by dennishobson

    ZjOeAjQq8xprQnevmjxyYBJKZb7HNDcarros ssanyong deck madeira plastica composite decking Your place is valueble for me. Thanks!…

    repondre message

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