Home | News    Friday 6 March 2020

Hard currency shortages prompted borrowing from private firms: Sudan’s minister

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March 6, 2020 (KHARTOUM) - Sudan finance minister said the country’s failure to pay a bill of wheat prompted his government to strike a deal with a private company to export gold and to use its income to ensure the country’s basic commodities.

Ibrahim al-Badawi speaking to the media on 5 March 2020 (SUNA photo)Ibrahim al-Badawi held a press conference on Thursday to explain the very difficult economic situation the country is facing particularly after the failure of the government efforts to address the lack of hard currency and curb the rampant inflation.

Sudan needs $302 million every month to purchase wheat ($ 45m) fuel $212m) and medicines ($45m) with some variations, according to al-Badawi.

"In the second week of December 2019, wheat stocks reached a critical stage, and the Bank of Sudan was unable to provide foreign currency to pay the costs of 50,000 tons of wheat," he further said.

This emergency forced them to borrow the needed $28 million from the little-known Al-Fakher Company for Advanced Business (ACAB), which in return was repaid in local currency and allowed to export gold to the international market.

The minister denied that he gave the ACAB the monopole of gold exportation, saying he decided to open gold exportation to the private sector after being controlled by the central bank as of 1 January 2020.

At the time, the government said it took this decision to end gold smuggling and to attract foreign currency.

The minister denied wrongdoing stressed he acted under the Government Contracting and Procurement Law which authorizes the Minister of Finance to contract with companies in exceptional circumstances.

Al-Badawi was accused of allowing the company to export five tons of gold with NIL VALUE, meaning that the company has no obligation to deposit its income in its banking account in Sudan or pay a value-added tax to the government.

Minister al-Badawi has been criticized for biting on probable Sudan’s removal of the terror list and the support of international financial institutions which will take several years before to be effective.

During his press conference which was attended also by traders, the minister was sharply criticized and some went even to request his resignation.

The date of the press conference coincided with a meeting for the two executive bodies - Sovereign Council and the government - with Forces For Freedom and Change (FFC) to discuss the economic situation in the country.

Crisis Management Committee

Following the meeting, Prime Minister Abdallah Hamdok announced the formation of a higher mechanism for managing the economic crisis.

The crisis management mechanism will be tasked with providing basic commodities including fuel, wheat and medicine, said Hamdok.

Also, the mechanism will review the income and outgo policy of the government, he added and provide the needed support for the agriculture sector.

The prime minister did not announce the composition of the crisis committee but the formation of this body suggests that al-Badawi will have to work its members.

Several FFC forces during the past months called to focus on the development of the national resource and stop waiting for uncertain international support depending on the U.S. administration which focuses more on its internal interests and the presidential election in November 2020.

Washington said ending sanctions on Sudan is a complicated process involving the Congress and related to several laws and not only the terror list.

(ST)

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  • 9 March 01:04, by Fathi

    Trading gold for wheat smh ....
    We have so much fertile land. We must learn how to expand wheat cultivation. We should be an exporter not an importer of wheat. I bet the arabs renting our land are producing a surplus of wheat and then selling it to us, to cover the cost of rent smh. We need to demand agricultural tech & expert consultation to expand our agriculture in exchange for rent.

    repondre message

    • 9 March 01:08, by Fathi

      We should also request tech to produce our own fertilizer. Once we learn how to properly farm our land, we should stop renting our land, and farm the land they have been renting out. It could lower unemployment and we could sell the products for more profit than letting them rent. We could sell the products for less to keep them customers until we find replacement buyers.

      repondre message

  • 9 March 01:13, by Fathi

    Despite most people being upset that Hemedti is running the higher mechanism for managing the economic crisis, I don’t mind it. The RSF is likely the cause of the crisis, given that they smuggle gold and basic commodities. Maybe appointing Hemedti will lead to him holding the RSF accountable and help clamp down on smuggling of essential commodities instead of undermining the economy.

    repondre message

    • 9 March 01:13, by Fathi

      We all know Hemedti is eager to prove himself as qualified to run the country.

      repondre message

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