Sudan’s parliament speaker acknowledges negative impact of dollar scarcity on economy

February 15, 2012 (KHARTOUM) – The speaker of the Sudanese parliament Ahmed Ibrahim al-Tahir admitted that the sharp decline in the value of the Sudanese pound against the dollar harmed the economy.

Al-Tahir pointed out that this situation resulted in a state of confusion and alarm in the private sector but at the same time assured that help is on the way.

The Sudanese official told reporters that the exchange rate instability created a lot of fears and concerns but stressed that most indicators now show that the downward trend in the country’s currency has come to a stop.

He added that the foreign currency shortage is closely linked to the talks between Khartoum and Juba on oil transit fees which so far have made little headway.

Last month South Sudan shut down its entire oil production of 350,000 barrels a day after Khartoum started seizing some of its oil in lieu of fees it says are unpaid. Juba accuses Khartoum of seizing 6 million barrels since December.

The pound hit a historic low on the black market earlier this month after losing more than 70 percent of its value since July as the loss of oil has cut off the main source of dollars.

But the parliament speaker refused to divulge specifics of the effects of Sudan’s oil loss on the budget except to say that the country can survive the crisis.

“Before the oil we were surviving and we were not awaiting oil to resolve our problems” al-Tahir said.

In a TV interview this month, Sudanese president Omer Hassan al-Bashir said that while 2012 will be a difficult year for the economy but that growing gold exports, cotton and sugar should compensate for the loss of the South’s oil since last July’s country’s breakup. He also revealed that “friendly” countries are also providing help.

Bashir said that the exchange rate should then improve to 3 pounds for a US dollar.

(ST)