‘Disastrous consequences’ predicted as Central Bank of Sudan bans imports

The Central Bank of Sudan (CBoS) has banned any import operations by banks without obtaining its prior approval.

The Central Bank of Sudan (CBoS) has banned any import operations by banks without obtaining its prior approval.

On Wednesday a CBoS circular banned any agent from importing resources using their own foreign currency.

Professor Hamid Eltigani, the head of the Department of Public Policy and Administration at the American University, described the decision as “a police security measure that has nothing to do with economic measures that will have disastrous consequences in a matter of days”.

He stressed that “with these measures the government will force the flight of investors, exporters, importers, and halt trade”.

He stressed that the CBoS circular will lead to more failure and scarcity in building materials, fuel, medicines, and commodities such as flour.

Cheques unpaid

Customers in Khartoum said that many banks have failed to pay cheques on the pretext of lack of liquidity.

Faisal Islamic Bank customers have complained that they could not withdraw the amounts they wanted to withdraw from their accounts.

They pointed out that the highest amount to be paid is between SDG 2,000 and SDG 3,000 (*$100-$160).

The former director of the CBoS, Sabir Mohamed El Hasan has warned at a seminar held by the economic committee of the Parliament of the country’s reaching stage of economy of scarcity.

Indicative rate

On February 5, the CBoS raised the indicative exchange rate of the US Dollar from SDG 18 to SDG 30.

The US Dollar has increased in less than three months by 125 per cent, and sharply increased in the last week. In November 2017, the Dollar traded at SDG 28. Last week the Dollar price rose by two Pounds within two days on the parallel forex market, to SDG 42.

On Sunday, currency dealers crowded near several Sudanese banks against the backdrop of the unprecedented scarcity of the national currency, increasing public demand for the Pound.

On Monday, a large number of ATMs of commercial banks in the capital city Khartoum went out of service, either owing to the network being inactive, or as there is no cash available. This included ATMs in Sharg El Nil and Bahri.

Trade infarction

Incoming and outgoing traffic at the harbour of Port Sudan has been compromised because of the new customs rate for the US Dollar. Suppliers refuse to have their goods cleared.

In December 2017, the government decided to raise the customs rate of the Dollar from SDG 6.7 to SDG 18 effective this year, in an attempt to combat the plummeting rate of the Sudanese Pound on the parallel hard currency market.

The result was that the prices of the main consumer goods doubled or even tripled in the first week of January. The price of a piece of bread increased from SDG 0,50 to SDG 1 ($ 0.14*).

* Based on the official US Dollar rate quoted by the Central Bank of Sudan (CBoS)