Sudan says US sanctions hurting exports, paints grim picture on economy

April 28, 2009 (KHARTOUM) – A senior Sudanese official warned that the global financial crisis is having a “large” impact on the economy particularly on oil exports.

Sudan’s central bank governor Saber al-Hassan speaking at a forum at Khartoum University said that oil revenue accounts for 18% of GDP, 50% of revenue and 80% of cash inflows.

Al-Hassan said that the central bank is losing 80% of oil revenue “which created additional burden” and noted that foreign investments from Arab Gulf states in particular as well as outside aid were negatively affected by the credit crunch.

Sudan is heavily dependent on oil exports which have declined sharply in terms of proceeds and volume in the wake of a financial crisis that swept developed nation and caused demand to plunge.

“Most oil producing countries were hit by the petroleum curse and Sudan is not an exception” Al-Hassan said referring to dependence on oil revenue.

“The challenge is how to convert the comparative advantage to a reality in production for international competition” he added.

The Sudanese official also said that US economic sanctions affected exports “given that the US represents 25% of world economy”. He also complained that international financial institutions refuse to provide Sudan with loans due to
sanctions.

In the past Sudan economy minister Awad Al-Jaz said that US sanctions provided his country with immunity from global crisis.

Al-Hassan said that government spending must be controlled and refraining from imposing additional taxes. He also warned from printing money or borrowing saying it will increase inflationary pressures.

Sudan’s 2009 budget introduced tax hikes including duties on imported vehicles and indirect taxes on telecom services to make up for falling oil prices.

(ST)