10 April 2012

Sudan: Qatar to Complete Purchase of Govt Bonds By End of April

Photo: Evan Schneider/UN
Omar Hassan A. Al-Bashir, President of Sudan.

Khartoum — The Qatari government informed Sudan that it will complete its promised purchase of government issued bonds as part of the deal struck by the leaders of the two countries last month.

The state minister at the ministry of finance and national economy Abdel-Rahman Dirar was quoted by Sudan official news media (SUNA) as saying that Qatar National bank (QNB) submitted all necessary documents to complete the process.

Dirar made the remarks following a meeting he had with QNB director and his delegation in Khartoum on Tuesday. He went on to say that this will help stop deterioration of exchange rate, improve balance of trade, lower inflation rate and enhance the investment environment.

The report did not mention how much in Sudanese treasury bills Qatar said it will buy except to say that it is "significant".

In March, the rich Arab Gulf state pledged a total of $2 billion investments in Sudan including "the purchase of government bonds issued by the Sudanese government and investments in different sectors particularly mining, oil, agriculture and services".

In a related issue the Sudanese finance minister Ali Mahmood Abdel-Rasool urged Islamic scholars on his country to issue a 'Fatwa' (religious decree) allowing the country to borrow using loans with interest.

He said that they will not resort to this option without exhausting all other financing means including domestic borrowing or from Islamic banks in the region.

According to a 2011 report by the International Monetary Fund (IMF), oil revenue constituted more than half of the Sudan's revenue and 90% of its exports.

But with the partition of the country into north and south, the latter took with it 75% of the oil reserves putting Khartoum in a tight spot economically particularly in terms of income and hard currency used to import basic food items.

Lacking other immediate ways to finance its deficit, economists say the government may resort to printing money, causing more inflation and further weakening the Sudanese pound.

Roughly $38 billion in foreign debt, along with US economic sanctions, limits Sudan's access to external financing.

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InFocus

Sudan: Qatar to Complete Purchase of Govt Bonds

Omar Hassan A. Al-Bashir, President of Sudan.

The Qatari government says it will complete its promised purchase of government issued bonds by end of April as part of the deal struck by the leaders of the two countries. Read more »