Home | News    Friday 20 July 2012

Sudan’s cabinet endorses recommendations on accepting loans involving interest

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July 19, 2012 (KHARTOUM) – The Sudanese council of ministers chaired by president Omer Hassan al-Bashir on Thursday approved recommendations put forward by the forum on financing state projects which included discussions on the controversial measure of accepting external loans with interest terms.

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Members of Sudan’s new cabinet take their oaths in Khartoum 10 December 2011. (Reuters)

Sudan’s Islamic government asserts that it has a policy of rejecting any loan offers that involve interest, though some observers question whether that rule has always been adhered to.

Thursday’s meeting was attended by the Central Bank of Sudan’s governor, Mohamed Kheir al-Zubeir and head of the Islamic Fiqh (Jurisprudence) Council Esam Ahmed al-Bashir. The latter said that the decision was necessitated by the lack of domestic financial resources and therefore the need to resort to external avenues for loans.

However, he stressed that each loan will be reviewed on a case by case basis after exhausting all other Islamic-conforming options and that they are to be used only for defense needs and infrastructure projects.

Islamic law prohibits accepting the collection and payment of interest, also commonly known as ’Riba’. However, very few Muslim countries enforce this rule. The doctrine of necessity in Islamic legislation allows recourse to loans with forbidden interest in some conditions.

Esam said the ‘Riba’ is authorised when the state fails to borrow money through all the "acceptable" funding sources inside and outside Sudan. He also said that such loans should be used for a limited time and only for vital issues such as for defence purposes, and infrastructure projects.

The Fiqh council chief said that his body, along with the parliament and the board of Sudanese Islamic scholars approved the exception at the forum. He revealed that 43 scholars and experts from inside and outside Sudan signed off on it and that 19 studies were discussed regarding this issue.

The issue of loans with interest triggered during the past months a heated debate among the members of the Sudanese parliament.

Al-Bashir said that the government must work quickly to reverse the factors that caused the need for interest loans through increasing productivity, cutting spending, improving revenue collection and combating corruption.

Sudan’s finances have tightened since oil-rich South Sudan seceded from the north last year. A row between the governments in Khartoum and Juba over the transport fee of the crude oil through the pipelines led to suspending the production entirely earlier this year.

The country faces a budget deficit of 6.5 billion Sudanese Pounds ($1.4 billion) following South Sudan’s independence.

The government last month approved tough austerity measures which involved shrinking federal and local governments, raising some taxes, cutting petroleum subsidies and also allowed the local currency to float substantially against the US dollar. This further fueled inflation and did little to improve the availability of hard currency or the exchange rate.

The International Monetary Fund (IMF) has urged Sudan to launch emergency measures to overcome what it called "daunting" challenges.

Small demonstrations erupted in different parts of the country to protest against the measures but the government managed to swiftly quell them.

Sudanese officials argue that the economy will get better by next year, though they offer few details on the basis of their projections.

Khartoum hopes to make up to $3 billion from gold exports this year, double the amount from last year. It made $603 million by the start of April, according to the latest official data.

The targeted $3 billion in gold revenue for this year is still well below Sudan’s 2010 oil revenue of at least $5 billion. But the government hopes it will keep the economy afloat while it seeks a negotiated solution over oil export fees from South Sudan.

Because of US sanctions and a hefty $38 billion debt, few countries are willing to extend credit to Sudan. Officials in Khartoum revealed that China, with strong trade ties to Sudan, has stopped financing dozens of projects because of a lack of oil collateral as a result of oil-rich South Sudan seceding last year.

(ST)

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  • 20 July 2012 08:10, by George Bol

    How do you make profit?

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    • 20 July 2012 08:24, by Dinka Dominated SPLA/M

      See what I always said here and there that this fake Arab of Sudan are not really Muslims but trade in Islamic name, go head your pain is my pleasure,

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      • 20 July 2012 09:41, by Logic

        This Bashir/ NCP junta have never represented Islam, they are a bunch of thieves.

        Loooooooool, tomorrow they will permit banks to charge interest due to economic reasoning and will use God knows how many scholarly bodies to justify it.

        The epitome of hypocrisy. hahahahaha

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    • 20 July 2012 08:39, by omoni jr.

      God Vs Money.lol

      Lion can eat grass when there is no meat!!!!!
      ridiclous,and very interesting news for the muslim world-wide.

      repondre message

    • 20 July 2012 08:42, by Ayom Dor

      Sudan should clear their backlogs first before accepting more loans and bad debts meant for warmongering with Rebels and South Sudan than developments!!

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    • 20 July 2012 09:03, by zulu

      First of all, insolvency, higher debt credit of 40 bil, plus a lack of resources to finance the loan all the more make it even nonesense to offer conditional loans. It is simply plain stupid. And it is meant to soar publicity as a measure to suppress descent.
      How long they will wait for South Sudan’s oil, is another issue. People don’t want any oil deal with NCP

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  • 20 July 2012 08:14, by Simon Gatluak

    If the gov of Sudan doing the righ things for his people. South Sudan shuold go a way

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  • 20 July 2012 08:24, by Force 1

    Sudan must be crazy to be hunting for more loans! Did Sudanese paid off $ 40 billion they owed China?
    Second of all; stolen South Sudanese oil and cash they didn’t pay back.
    Which is the dumbest country that’s dumbed enough to lend them more money that they are not going to pay back?

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  • 20 July 2012 08:28, by Umoja

    Oh! God forgive Sudanese Muslims for preferring money over religion. Islam has become victim of the daunting economic situation in Sudan.

    Final what was taboo Haramo has become clean Halal. imagine! economy is favored over religion. Loan with interest is to be accepted!! Haaa!

    Umoja

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  • 20 July 2012 08:29, by Lula

    Hahaha...were is money being saved goes to?

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    • 20 July 2012 09:14, by lukee

      Mohmade, Jalaba, Al-Bashir is still crying about South oil with it session that make your economy difficult now and it is his fragile regime in the north and fake Islamic rules on none Muslim, Bashir don’t carry u will cry until your death fake Ja’llain boy.

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  • 20 July 2012 08:55, by jur_likang_a_ likan’g

    Sudan should have realised it is an island is an invisible planet. It is high time it interacts with international community without disregarding the interests of the non-islamic component of world community.

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    • 20 July 2012 08:59, by jur_likang_a_ likan’g

      Sudan should have realised it is not an island in an invisible planet. It is high time it interacts with international community without disregarding the interests of the non-islamic component of world community

      repondre message

  • 20 July 2012 09:04, by mohamed mahgoub

    I keep saying this is not Islam and we don’t like it .the NCP criminal regiem just using it to control this African country this is the first official step to back away from sharia tomorow they open the market to import alcohol and legilise gambling welcome globlisation

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  • 20 July 2012 10:00, by Beneben Bai

    Wow, it is interesting. Mohamed Ali, Jalaby, northern sudanese and like, ramadan karim and please tell us more about this hot potato

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    • 20 July 2012 16:44, by sudani ana

      Beneben
      I’ll respond to you. In Islam there is a rule "Aldarurat tubeeh almahzorat" which is what is known as the rule of necessity. For exmple if someone is dying of thirst in a secluded area and only alcohol available, then it is permitted for him to drink alcohol without having committed a sin. This rule is not new. In the west muslims are allowed to have a mortgage to buy a house.

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      • 20 July 2012 16:51, by sudani ana

        Ramadan Kareem to all Muslims and non-Muslims in Sudan and South Sudan. I Hope that next Ramadan finds us healthy and happy.

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  • 20 July 2012 11:02, by Kikiji longiro

    Hey you pple. We called these Sudanese arabs basturds long time ago because they refused their truth.Let us see out of the $2 billions Algeria & Quatar gave to Sudan as a loan without RABA.What else will these blind people without tears in eyes do.Sticking in Islamics laws,Islam itself will not return to them the RABA although they all go for Haji in Suadia.

    kikiji

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  • 20 July 2012 11:14, by Kikiji longiro

    THE STUPID ALWAYS DIED INSIDE HIS/HER STUPIDNESS.THESE SUDANESE ARAB KNOW THAT WITHOUT SOUTH SUDAN THEY WILL NEVER NEVER PUT A STEP FORWARD.

    GOOD LUCK SINCE THE MEETING OF AL BASHIR & KIIR THE MOSQUES PARLIAMENT OF SADIQ AL MADHI IS GETING TINNER & TINNIEST.AL BASHIR HAVE OVER RUN THE SUDANESE POLITICAL SYSTEM LONG TIME AGO.WHAT IS LEFT ALIVE IS ONLY SOUTH SUDAN.

    kikiji

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  • 20 July 2012 11:22, by Kikiji longiro

    Accept the word HARRAM so that we will hold HAPIS AL ASEDI of Syria or Al Bashir our president in Islam.

    As soon as possible Kiir have to open the Sudan airway so that our thirsty brothers like Mahammed Ali & Jalaby will come to take bath with a fresh water/beers in Juba & JUNUBU will wish them good time.

    kikiji

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