March 19, 2014 (KHARTOUM) – The Sudanese ministers of finance and oil held talks on Wednesday with the head of the Export-Import Bank of China Li Ruogu in Beijing to discuss role his bank can play in financing more development projects in Sudan and strengthening economic partnership between the two countries.
- Workers for the China Petroleum Engineering & Construction Corp (CPECC) construct new oil facilities in Sudan. (Photograph: Trevor Snapp/Bloomberg/Getty Images)
Ruogu underscored China’s commitment to economic cooperation with Sudan and disclosed that they are close to completing the process of financing the new Khartoum airport after finishing the technical data and the related financing agreement .
He also said that the bank is positively Blue Nile Sugar Factory and the Omdurman-Bara road projects.
The two Sudanese officials also met with executives at the China National Petroleum Corporation (CNPC) to discuss ways to boost oil production in Sudan and increasing the capacity of the Khartoum refinery.
Both sides affirmed the importance of cooperation between them and the need to develop and expand it to serve as a model for cooperation between China and developing countries.
They also hailed the great attention and care that oil cooperation receives from the leaderships of Sudan and China.
The Sudanese ministers also held meetings with managers in several other Chinese banks as well as officials of the Chinese Communist Party and the leadership of the State Committee for Energy and head of companies that have projects underway in Sudan.
China has been Sudan’s largest foreign investor particularly in oil and telecommunications after western firms shunned the East African nation due to conflicts and sanctions.
But a report by Reuters cited growing difficulties facing Chinese investments as a result of the deteriorating economy.
China’s exports and imports to and from Sudan, which totaled $11.5 billion in 2011, amounted to just $3.3 billion in the January-November period of 2012, according to official Chinese data quoted by Reuters.
The drop in oil trade accounted for much of that decline. But even while the oil industry has been shut down trade has continued to fall. In the first five months of 2013, Chinese exports to Sudan fell 8 percent from a year earlier to $1.7 billion, the data shows.
Sudan has seen its economy take a nosedive after the south became independent in July 2011, taking with it three-quarters of the once united country’s oil output. According to figures from the International Monetary Fund (IMF), the country’s GDP contracted by 4.4% in 2012.
After the country’s partition, the Sudanese government was forced to undertake austerity measures including one last September that triggered violent demonstrations across the country.
The Sudanese pound has lost more than half its value, pushing inflation rates to record levels given that the East African nation imports most of its food.
As a result, foreign investment companies operating in Sudan are suffering from the shortage in hard currency and continue to complain about losing millions of dollars when buying it from the black market.
More recently it was revealed that a number of Saudi and European banks took a decision to stop dealing with Sudanese banks.
Sudanese officials attributed the move to pressure by the United States which has comprehensive economic sanctions imposed on the East African nation since 1997.