Analyst: Foreign Exchange Bill ‘harmful to Sudan economy’

Researcher and Economic Analyst Dr Haytham Fathi has sharply criticised Sudan’s Foreign Exchange Bill, describing it as harmful to the national economy of the country.

In a statement to the official Sudan News Agency (SUNA), Dr Fathi called on the concerned authorities to subject this Bill to further study and discussion with the participation of all concerned parties such as economists, the private sector, expatriates, investors and others.

‘Contradicts Sharia’

Dr Fathi points out that the Bill allows the acquisition of gold and foreign exchange only in accordance with the regulations set by the Central Bank of Sudan – a matter that contradicts Islamic Sharia law, which allows the acquisition, sale, purchase, and trade in general.

He added that “solving the economic problem that the country is going through now is to increase production and productivity to upturn the volume of exports and replace imports to support reserves of the country of foreign exchange with the reduction of government spending to the maximum degree.”

Inflation

Last week, Sudan’s Ministry of Finance announced that the inflation rate has recorded a sharp rise by 54 per cent in the first quarter of this year, compared to 33 per cent of the same period in 2017. The Ministry also acknowledged a number of challenges, notably the exchange rate policy and the government subsidies for fuel and medicine.

State Minister of Finance and Economic Planning Majdi Hasan Yasin attributed the rise in inflation to the widening in the gap between the indicative US Dollar rate quoted by the Central Bank of Sudan and the price on the parallel market, as well as rising import costs.

Sudan’s inflation rate hit a record 57.6 per cent in April, compared with 55.6 per cent in March. The inflation has a worsening effect on wages, unemployment, poverty and food and health conditions, as prices for basic goods in Sudan continue to rise.

Forex shortage

As reported by Radio Dabanga, the shortage of foreign currency is impacting on industries and sectors dependent on imports.

A number of pharmaceutical companies in Sudan have confirmed the scarcity of several medicinal products in the country. More than 200 types of medicines have become completely unavailable.

A number of owners of companies have complained banks refuse to open credit, pointing that commercial banks refuse to grant foreign currency even after ratification by the Central Bank of Sudan. This requires the pharmaceutical companies to import medicine first and get the currency later.

The owners of pharmaceutical companies in Sudan have pointed out that the foreign and local companies, however, refuse to provide medicines without payment in advance.

Electronic payment

The Dean of Bahri Ahlia College Professor Kamal Eisa has praised the policy adopted by the Higher Committee for E-Payment headed by the Minister of Finance and Economic Planning Mohamed Osman El Rikabi aiming at the settlement of the value of government services through the electronic payment system and prevention of the payment through the traditional means (cash payment) as of the end of the year 2018.

According to SUNA, Eisa added that this policy, in addition to its contribution to the increase of the volume of revenues through the introduction of assets into the banking system, also works to preserve and secure citizens’ funds and facilitate their financial transactions through technical systems as well as its effective role in the flow of financial funds directly through the electronic payment systems available.

Professor Eisa stressed the importance of expanding the establishment of electronic sales points for the success of this policy, expecting increase in production by applying this policy because of the effectiveness of the collection methods.

Eisa asserted the need to develop a plan to link the government institutions with the automated systems to increase the speed, efficiency of collection and tightening the control of public funds.