Published on April 3, 2015
(KHARTOUM) – Sudan’s minister of finance, Badr al-Din Mahmoud, said that his country would gain large economic benefits from its participation in the Saudi-led coalition against Yemen’s Huthis.
Sudan formally announced its participation in the military coalition comprising mainly of Arab Gulf states in addition to Egypt, Jordan and Morocco.
The offensive codenamed “Operation Decisive Storm” is targeting Shiite Houthi militants allied with Iran, who have taken control of Yemen’s capital Sanna since September 2014.
Mahmoud told reporters on Thursday that the coming period will witness a clear improvement in economic cooperation between Sudan and the Gulf countries, saying it will have positive effect on the macro economy not only the exchange rate.
Sudan’s economy was hit hard since the southern part of the country declared independence in July 2011, taking with it about 75% of the country’s oil output.
Sudanese pound has lost more than half its value since South Sudan’s secession.
Mahmoud emphasised the value of the pound began to strengthen prior to recent improvement in Sudan’s ties with Arab Gulf nations, pointing his ministry carried out several fiscal and monetary measures which cut inflation rate and strengthened the pound.
He expected the price of the US dollar will drop significantly in the coming period, stressing this would narrow the gap between its official exchange rate and the black market.
The official dollar exchange rate stated by the Central Bank of Sudan (CBoS) is 5,8 SDG while it ranges from 8,9 to 9,3 in the black market.
Media reports this week said that Saudi Arabia has deposited $4 billion at the CBoS which led to a slight decrease in the dollar price in the black market. However, the Sudanese government did not confirm these reports.
The finance minister told Al-Sudani daily Friday that his country would gain considerable economic benefits as a result of its participation in the Saudi-led coalition, expecting price of the dollar will sharply fall in the black market soon.
Mahmoud hinted to ongoing economic arrangements which he declined to reveal, expecting that results of those arrangements will be seen within the coming period.
The Sudanese president Omer Hassan al-Bashir said on Thursday he is confident that the country’s security and political situation will be more stable and its economic conditions more prosperous.
Meanwhile, the former secretary general of the Forex Union, Abdel-Moneim Nour al-Din, expected that prices of foreign currencies would witness further decrease in the black market.
He told the official news agency SUNA that supply of foreign exchange has increased due to fears of continued decrease in its prices, saying opening of external banking transactions would increase supply of foreign exchange.
“Reports about the [Saudi] investment deposit [at the CBoS] had significant impact on the [black market]. It led to increase in supply and decrease in demand [of dollar]”, he added.
Nour al-Din also expected large investments flows following introduction of the new investment law, saying investors were reluctant to come to Sudan due to problems pertaining to foreign exchange and banking transfers.
He called for attracting financial savings of the expatriates, pointing to the CBoS decision issued last August which allowed disbursements of external transfers in foreign currencies.