‘Suspension Arab bank dealings heavy blow to Sudan’: experts

The decision of Saudi Arabian and some European banks to stop transactions with Sudan will clamp-down the public and private economic sectors in the country. According to economic experts, the suspension seriously affects the movement of cash transactions, and is a heavy blow to the already deteriorating economic situation, the Sudanese daily Akhbar El Youm reported today (Sunday). “The Sudanese economy is based on an ambulatory programme aiming at the promotion of Sudanese exports and the substitution of import commodities,” Dr Yasin Himeida Ibrahim, Secretary-General of the Chambers of Commerce Federation, explained to Akhbar El Youm. “The exports indeed increased lately. But the suspension of financial transactions by Saudi and European banks will adversely affect trade dealings between Sudan and banks in those countries, and reduce the much needed hard currency inflow.” The Governor of the Central Bank and Minister of Finance are currently negotiating with Saudi financial institutions to reverse the decision, Ibrahim noted. ‘Chaos and corruption’ Senior economist Dr Kamal Karrar blamed the policies of the Central Bank of Sudan (CBS) as well as the faltering Sudanese banking system. “There are banks where the percentage of depositors’ money that cannot be recovered amounts up to 65 percent. Chaos has hit the Sudanese banking system, besides the increasing spread of corruption.“The negative impact of the decision by the Arab banks is a fact, Karrar noted. “Apart from the loss of remittances from more than three million Sudanese working in Saudi Arabia, the effects of the suspension will become evident through the export and import figures. The trade balance between Sudan and Saudi Arabia is in the latter’s favour. In 2012, Sudanese imports from Saudi Arabia amounted to US$758 million, while the results of the exports were not more than US$309 million.” The economist denied that the USA is behind the move. “America does not have a problem with the ruling regime. Recently the USA acclaimed Sudan’s cooperation in the fight against terrorism.” Internal proceduresOn Wednesday the CBS had issued a press release on the decision of the Arab and European banks to suspend transactions, stating that “The decision is related to internal procedures within the framework of institutional control at those banks. This is normal in the field of banking that experiences continuous changes.” Sudanese banks have a diverse network of agents and associates in the Arab region, Europe, and Asia that “can help” facilitate foreign trade transactions, the press release said.In November 2013, the CBS devalued the Sudanese Pound by 22.6 percent against the US Dollar, the second such a move in just over a year. The scarcity of hard currency had become so pressing that the CBS had started using up the general reserves of commercial banks, which are meant to be kept as deposits with the Central Bank. File photo Related: Saudi, European banks halt Sudanese transactions (27 February 2014) New head Central Bank Sudan (16 December 2013)