‘No quick fix for Sudan’s hard currency crisis’: economist

The US Dollar rate rose on the Khartoum black market on Monday. The Minister of Finance attributed the rise to telecommunications companies’ purchase of significant sums of hard currency on the black market. According to an economic analyst, the black market rates will not decrease in the near future.

The US Dollar rate on the Khartoum black market jumped to SDG11.6 on Monday. The official US Dollar rate remains fixed at SDG6.1.

The Minister of Finance, Badreldin Mahmoud, accused the telecommunications companies in the country of contributing to the most recent deepening of the foreign currency shortage.

On Tuesday, the Minister told the Parliament that the government will take measures against these companies in coordination with the National Telecommunication Corporation.

He added that measures will be taken to to reduce the “unforeseen transfers that lead to an increased demand for hard currency”. Based on the “rationalisation of government spending”, the measures will include a reduction in travel by government officials and an increase in air tickets prices.

The Central Bank of Sudan will take measures in the short, medium and long term to regulate the foreign exchange market, he added.

The Minister urged the Parliament to pass an amendment of the Sudanese Penal Code inflicting higher punishments against the “parallel market” currency traders.

‘Long-term development’

According to economic analyst Abdelhadi Abdallah, the rise of the black market hard currency rate is to be attributed to “the inability of Sudan’s exports to compete with other countries on the global market” in general.

“Financial support from the Gulf states, if any, will be in the form of long-term development projects, and not impromptu cash injections Khartoum hopes to receive.”

“The telecommunications companies’ purchased large sums of hard currency on the black market to change them into profits abroad. This is the main reason for the latest rise of the US Dollar,” he said in an interview with Radio Dabanga on Tuesday.

Abdallah ruled out that improved Sudanese relations with the Gulf countries will not affect the black market rates, pointing to the impact of the drop in oil prices on the economic situation in the Gulf.

“Moreover, the rampant corruption in the country has deprived Sudan of loans and donations. Many countries now resort to direct supervision of the implementation of development projects,” he explained.

“Financial support from the Gulf states, if any, will be in the form of long-term development projects, and not impromptu cash injections Khartoum hopes to receive.”