CBoS: ‘SDG126 billion govt borrowing fuels Sudan inflation’
The deputy governor of the Central Bank of Sudan (CBoS), Mohamed Badawi, says that the Sudanese government borrowed SDG126 billion* from banks during the first six months of this year, representing 85 per cent of the total turnover of the banking system. This led to the curtailment of the finance provided to the productive sectors.
In a paper presented to the National Economic Conference that concluded on Monday in the Sudanese capital Khartoum, Badawi said this attributed the continuing high inflation rates, which reached 166.83 per cent in August, to monetary expansion resulting from the CBoS financing of the government, in addition to the continuous devaluation of the national currency.
Badawi recommended controlling the government’s borrowing from the CBoS, as well as the government’s exit from the participation in bank capital, to maintain its neutrality in supervision and follow-up. He called for the inclusion of the resources of all government agencies, such as civil aviation transit fees, in the public revenues. The Ministry of Finance should hold a mandate over all public funds, prohibiting retention, expanding the tax umbrella, and cancelling customs exemptions.
Members of the conference workshops on monetary and financing policies, the management of the exchange rates and the balance of payments, recommended converting the telecommunications companies operating in Sudan into public joint-stock companies as a condition for renewing their license to operate in the country.
The workshops further suggested the establishment of an import and export bank, a bank for cooperation, and the merging of the savings and family banks into one micro-finance bank.
They called on the military and security sector companies to abandon trade and stop competing with the private sector in export and import. There are approximately 200 companies in Sudan owned by the military and the security apparatus, who conduct substantial trade in vital commodities such as fuel, food, clothes, shoes, meat, and agricultural crops.
*USD 1 = SDG 55.1375 at the time of posting. As effective foreign exchange rates can vary widely in Sudan, Radio Dabanga bases all SDG currency conversions on the daily US Dollar middle rate quoted by the Central Bank of Sudan (CBoS)
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