Khartoum — In a move applauded by economists, the Central Bank of Sudan issued a directive to commercial banks to close accounts of government bodies and institutions and transfer their balances. They said this would intercept money kept outside Sudan's banking system.
The directive instructs all banks to deposit the balances in the Central Bank, both in their local and foreign currencies. It has threatened to take penalties in accordance with laws and regulations in the event of non-compliance with the new directive.
Welcoming the directive this week, economic experts have argued the decision has come too late.
Economist Dr. Sidgi Kabello described the decision as an important and good one. It brings the unified accounting to the General Treasury of the Bank of Sudan, while closing and intercepting money kept outside the banking system. "That leads to corruption, financial chaos and an economic crisis."
According to Kabello, the greatest corruption schemes take place in the oil and gold sectors.
"The World Bank has estimated the amount of money Sudan had lost as a result of keeping money outside the banking system is more than $50 million. Meanwhile Sudanese economists have estimated it to be about $73 million."
"This decision combats the phenomenon of keeping money outside the Sudanese banking system." - Dr. Khalid El Tijani
The editor-in-chief of the weekly economic Elaph newspaper, Dr. Khalid El Tijani, also welcomed the directive. The journalist specialised in economic affairs said that it is no new decision. "The aim is to combat the phenomenon of keeping money outside the banking system by putting the government's hand on public money.
"It restores the mandate of the Ministry of Finance on public money after everybody, including government institutions and units, has a special account in foreign and local currencies."
El Tijani added that he expects fierce resistance. "The implementation of the decision needs a central and institutional authority, procedures and mechanisms to be contained in policies. The directive will not hold if violators and offenders are not held accountable, tried and imprisoned."
Dr. Kabello also told Radio Dabanga that he expects the decision to find resistance from certain currents in Sudanese politics and the ruling party, the NCP. "They will seek an exception to the directive and if they find it, it means a total failure [... ] The government should not back down on this just decision if it is serious about economic reforms."
The Central Bank of Sudan (CBoS) carries out policies that aim to revitalise the Sudanese economy, according to the About page on its website. It aims to formulate and implement a monetary policy, in the first place depending on the market forces in such a way to achieve objectives of the national macro economy, in consultation with the Minister of Finance.
Earlier this month, the Bank issued an oral order to banks reducing the amount of cash withdrawals to customers from SDG 2,000 (*$70) to SDG 1,000 ($35). Analysts told Radio Dabanga that the move would increase the suffering of employees and workers who had been forced to deposit their salaries in the banks. An analyst attributed the decision of the Bank to the exit of money from the commercial banks and lack of confidence in the banking system.
In June the Central Bank of Sudan announced the launch of a new banknote of SDG 50, worth $1.77*, in the coming period. It explained the decision by stressing the leakage of counterfeit currency for trading that has increased liquidity in Sudan. According to Dr. Kabello the move was to introduce liquidity in the banking system.