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IMF endorses staff-monitored programme for Sudan

September 25 - 2020 KHARTOUM
Acting Finance Minister Heba Mohamed Ali (SUNA)
Acting Finance Minister Heba Mohamed Ali (SUNA)

The Executive Board of the International Monetary Fund approved an agreement concluded between the Government of Sudan and the Fund yesterday, which will pave the way for solving economic difficulties in Sudan.

Structural distortions left by the former regime will be repaired and the stability required to achieve a just and sustainable peace across the country will be ensured,  according to the agreement.

Acting Minister of Finance, Heba Mohamed, confirmed that the implementation of the programme will make Sudan eligible for more than $ 1.5 billion annually in direct development grants to stimulate investment and revive the economy. This will create job opportunities for young people, and increase revenues and exports, according to the minister.

She added that the implementation of the necessary reforms will produce tangible benefits for the Sudanese people, the most important of which is exempting Sudan's debt arrears, as Sudan reaches a "decision point" for the Heavily Indebted Poor Countries (HIPC) programme. This programme aims to ultimately exempt Sudan's debts, which are close to $60 billion. This would allow Sudan to obtain finance for major development and production projects across the country, such as El Gezira agricultural project, the Port Sudan ports, and national railways.

Pound rises

The Sudanese pound reached SDG240* again yesterday, while the selling price of the Euro reached SDG280, the Saudi Riyal SDG65, and the Emirati dirham 70 pounds.

After the Dollar rate on the parallel market jumped to SDG260, halting the stock exchange and causing a partial closure of the gold market in Khartoum, the acting Minister of Finance declared the State of Economic Emergency on September 10.

According to economist Kamal Karrar, the significant rise in the price of the Dollar is caused by the economic policies of the Central Bank of Sudan and those stipulated in the amended 2020 National Budget.

Traders in Khartoum said that police campaigns against parallel market dealers have caused hard currency value to decline since September 10, but because of the scarcity of foreign exchange supply and Sudan's failure to obtain any foreign support from grants or loans after Emirati-American talks, the rate began to rise again.

They expect a further rise in the coming days if the demand for foreign currencies continues to increase at the current pace.

Bread and fuel crisis

Listeners reported to Radio Dabanga from Khartoum that bakeries are overloaded with people queueing the whole day for a loaf of bread, and vehicles are waiting at gas stations for hours to refuel. Car owners have been sleeping at stations in order to get fuel.

The bakery owners steering committee reported that 500 bakeries in Khartoum will close over the next two days, as subsidised flour rations will be reduced from 35,000 (100 kg) bags to 22,000 bags per week.

A member of the bakeries steering committee said that municipal bakeries’ share decreased to 7-12 sacks within three days, while state bakeries' share decreased to between 10-20 sacks.

The lack of supply has reduced the amount of work available, with most bakeries only open for six hours, he said. The rest of the state bakeries may be closed if the situation continues in this way.

Most of the bakeries now sell bread at the commercial price, where a loaf of bread is sold for SDG10*, according to the steering committee member. He stressed the need for the Ministry of Industry and Trade and the Ministry of Finance to intervene immediately. The bread crisis began last week.

Red Sea state

In Red Sea state, Resistance Committees active in the neighbourhoods of Port Sudan organised a protest in front of the state government secretariat yesterday. They demonstrated against the bread crisis, including the reduction in the state’s share of flour. They demanded the dismissal of the state’s Economic Committee in a statement yesterday.

The protestors handed a memorandum to the state governor demanding that the state's daily quota of flour is restored to 4,400, giving them 72 hours to respond.

Governor of Red Sea state, Abdallah Shankarai, said he understands the demands of the Resistance Committees and praised their peaceful approach.

He explained that these crises are a result of the economic crisis, as the state needs hard to import wheat and flour. He added that the fuel crisis will be addressed soon.

The governor confirmed that he has had contact with ministers of Trade and Energy, stating that they promise to resolve the crises soon.

North Kordofan

The North Kordofan Oil Division revealed that 50% of its factories have stopped operating for various reasons, chief among them electricity cuts.

Saleh El Tijani, head of the Oil Division in North Kordofan, said that electricity cuts lasting over 8 hours happen daily at the majority of factories. The factories operate on a 24-hour shift system.

* USD 1 = SDG 55.1375 at the time of publishing this article. As effective foreign exchange rates can vary in Sudan, Radio Dabanga bases all SDG currency conversions on the daily middle US Dollar rate quoted by the Central Bank of Sudan (CBoS).


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