Sudan business: Cash deposits fail to dent Sudan’s liquidity crisis

Businessmen in Sudan have said that the initiative of depositing their money in banks has “miserably failed to make any noticeable impression” on the ongoing liquidity crisis. The plummeting value of the Sudanese Pound (DSG) against the US Dollar is forcing pharmaceutical companies to pull out of the country.

A businessman told Radio Dabanga said that recent deposits by business of “more than SDG 7 billion”, have not produced any tangible result.

Economists have predicted a new wave of price rises in the coming days after the cost of fuel to the industrial sector increased by SDG 19 ($0.40*) per gallon of diesel for industry and mining.

They have also predicted the collapse of banks and financial institutions in the event of the application of interest rate with a margin of five per cent.

Liquidity

The recent printing of new currency by the Central Bank of Sudan has been necessitated by hyperinflation, coupled with a chronic shortage of hard cash. Banks have limited cash withdrawals so traders and the public prefer to keep their cash at home, rather than deposit it into banks.

Over the past few months, as the value of the Sudanese Pound has dropped steadily against the US Dollar. In December 2018, the Central Bank of Sudan issued a decision to set the limit of cash withdrawals by bank card at ATMs.

Medicine shortage

The Central Pharmacists Committee in Sudan had confirmed that the Indian company Sun Pharma, which specialises in psychiatric and neurological medicines, as well as the scientific office of the Saudi company Jamjoom in Khartoum, specialised in eye medicines, have been closed, due to the increasing exchange rate of the Dollar against the Sudanese Pound.

A statement issued by the Pharmacists Committee this week pointed out that the closure of the two companies preceded the withdrawal of the UK-based pharmaceutical GSK branch in Sudan.

It considered the exit and the closure of companies in the absence of alternatives a real disaster for the public.

Pharmacists stop imports

As reported previously by Radio Dabanga, over the past few months, as the value of the Sudanese Pound has dropped steadily against the US Dollar, pharmaceutical companies have reportedly imported less to no medicines which has led to a scarcity of a number of medicines.

The Central Bank of Sudan and Market Makers Committee have identified the price of the import of medicines to stand at SDG 47.5 per Dollar for medicine importers.

Meanwhile the Sudanese board of medicines and toxins has instructed pharmaceutical companies to sell all medicines in the stores at the minimum price.

* As effective foreign exchange rates can vary widely in Sudan, Radio Dabanga bases all SDG currency conversions on the Market Makers Mechanism-determined daily US Dollar rate quoted by the Central Bank of Sudan (CBoS).