Sudan sees 6.5 pct real economic growth in 2004 : Finance minister
KHARTOUM, Feb 21 (Reuters) – Sudan is targeting economic growth of 6.5 percent in 2004 and the budding oil producer is moving away from its dependency on crude oil sale revenues, Finance Minister al-Zubeir Ahmed al-Hassan said on Saturday.
Hassan said he expected to normalise relations with the World Bank and IMF within six months of signing a peace agreement currently being negotiated in Kenya to end more than 20 years of civil war.
The minister said Sudan, a heavily indebted nation, had its membership of the IMF and World Bank revoked in 1997 for failing to honour debt repayments.
“Real GDP growth was 5.8 percent last year, 2003…and we are targeting 6.5 percent this year,” Hassan told Reuters in an interview.
“Our main challenge is to be not dependent on oil revenues as prices are fragile,” he said, adding he expected 45 percent of government revenues in 2004 to be oil and 55 percent non-oil, compared with a roughly equal proportion a year ago.
Sudan’s oil minister said in September crude exports were at 300,000 barrels per day (bpd) and were expected to reach 600,000 bpd by 2005.
Hassan said the non-oil sector would be developed in areas of services, communications and livestock and increased productivity in agriculture, namely cotton, wheat and sorghum.
Hassan also said he expected an agreement to be reached to reschedule Sudan’s $20.5 billion external due debt within two years of a southern peace deal. He said Sudan was eligible for a highly indebted country debt relief initiative that provides 90 percent forgiveness of due debt.
“Out of $24.1 billion total debt, $20.5 billion is already due…and Sudan should have forgiveness for more than 90 percent of the due debt,” he said.
Sudan’s southern conflict has killed more than two million people and broadly pits the Islamist government in Khartoum against the mainly Christian, animist south. The conflict has been complicated by issues of oil, ethnicity and ideology.
Hassan said Sudan would need at least roughly $14 billion for infrastructure, security, humanitarian aid and rural development in the south in the first six years after a peace deal. Under agreements reached so far in talks, the south will hold a referendum on secession after a six-year transition.
He said the European Commission had pledged funds worth about $400 million to be released after a peace deal in the south. He said the United States, Britain and Norway had also pledged aid but said amounts had not been announced yet.
NEW CONFLICT
Hassan also said an escalating conflict in Sudan’s western Darfur region would negatively affect foreign investment and international aid expected after a peace deal in the south.
Two main rebel groups took up arms against Khartoum a year ago accusing the government of sidelining arid and remote Darfur and arming Arab militias to loot and burn African villages. Some analysts have said it could derail the southern peace process.
“Of course, the legacy of the Darfur conflict will have an effect on investment, as any conflict will,” he said. “But Darfur is a local conflict not like the south… and I cannot see it being so important.”
He said major military operations by the government had now ended in Darfur.
Hassan said foreign direct investment in Sudan had increased to more than $1 billion in 2003 from $600,000 the year previous, even with the troubles in the west.
“The most important thing for Sudan is now that after a (southern) peace deal Sudan should keep macroeconomic stability,” Hassan said, adding Sudan would keep state borrowing from the central bank to one percent of GDP as it is now and maintain the free flow of foreign currency in and out of Sudan.