Khartoum — If the gold produced in Sudan were not sold but used as a guarantee for financing, the country's financial problems would be solved, says Minister of Minerals Dr Hashem Ali Salem. Meanwhile, the economic situation continues to deteriorate, with the country's reserves of cooking gas almost depleted, and soaring prices of consumer goods.
During the weekly News Forum at the Ministry of Information in Khartoum on Wednesday, the Sudanese Minister of Minerals announced that the gold production has increased to more than 100 tons during the current year.
The Minister reported, according to the official Sudan News Agency (SUNA), that Khartoum received a financing offer of more than $6 billion from four large mining companies, to be guaranteed by gold produced in the near future. However, he said, only $4 billion would be enough to solve the country's economic problems.
Had the Central Bank of Sudan purchased gold for a reasonable price, miners would not have smuggled the precious mineral, Salem stated, and stressed the necessity to establish a gold bourse.
He further pointed out that his Ministry accounts for five per cent of the national domestic product. He hopes to increase this figure in 2018, when the Ministry will stop exporting a number of raw minerals in 2018, and start the indigenisation of the minerals production industry.
In March this year, the Central Bank of Sudan and the Ministry of Minerals announced new policies to buy and export gold. The new policies allow the private sector to export 50 per cent of gold it buys, and sell the other half to the Bank.
According to a recent report by the Sudan Democracy First Group (SDFG), the country's gold industry is affected by "bureaucratic and political corruption, including embezzlement, cronyism and patronage."
Businessman and Member of Sudan's National Assembly, Ali Ibreisi, reported the depletion of the country's reserve stocks of cooking gas during deliberations on the much-criticised 2018 national budget by the Parliament on Wednesday.
He said that the acute lack of cooking gas led to an increase of its prices at the market. A cylinder is now sold at the market for SDG 200 ($28).
He further accused the Central Bank of Sudan of adopting the new import policies on the basis of foreign currency rates instead of the local currency rate, and said this should be halted as soon as possible.
The Dollar has continued its steady rise against the Sudanese Pound at the black market, and approached SDG 28 on Thursday
Professor Hamid Eltigani, Head of the Public Policy and Administration Department at the American University in Cairo, predicts that the Dollar exchange rate at the so-called "parallel market" will exceed the SDG 50 barrier in the upcoming period.
Raising the US Dollar rate from SDG 6.6 to SDG 18 [as proposed in the budget] is a step towards the liberalisation of the US Dollar price, he said. But it will not prevent the steady rise of the Dollar rate on the black market, as the government envisages.
The economist warned of the impending collapse of the Sudanese economy if the National Assembly will pass the proposed 2018 national budget.
"The budget of 2018 is a real disaster," Eltigani told Radio Dabanga earlier this week. "68 per cent of the revenues depend on taxes and 32 per cent on borrowing; whether from the banking sector or from countries." He further highlighted the absence of development in the budget, just as "the Sudanese government has officially abandoned spending on services, especially education and health".
He ridiculed statements by Finance Minister Dr Mohamed El Rikabi that the aim of the proposed budget is to reduce inflation rates from 34.1 percent to 19.5 percent.
"It is impossible to lower the inflation rates while the government continues to borrow from the banking sector by printing more currency," he said. "The real inflation rate in Sudan now exceeds 50 per cent."
North Darfur has been witnessing sharp price increases since Wednesday.
"The price of a 50kg sack of sugar recently rose from SDG 650 ($92) to SDG 850 ($121), a 100kg sack of sorghum flour from SDG 530 ($75) to SDG 809 ($115)," a resident of Kutum complained to this station.
A trader in the town attributed the food prices increases to the severe fuel crisis in the country. "The price of a gallon of petrol has risen from SDG 35 ($5) to SDG 50 ($7)," he reported.