Khartoum, London- Sudanese Minister of State for Finance Magdi Hassan Yasin stated that his country plans to end all subsidies on food and fuel by 2019 and forecasts the lifting of U.S. sanctions will earn its hard currency-starved economy USD4 billion per year in remittances.
“Distortions will be removed from the economy with the total cancellation of consumption subsidies,” Yasin said. “That includes for fuel, electricity, and imported wheat.”
During an interview with Reuters, he said that in the final days of Barack Obama’s presidency, Washington announced plans to lift a 20-year-old trade embargo, unfreeze assets and remove financial sanctions in response to Khartoum’s cooperation in fighting ISIS and other groups.
“The lifting of American sanctions is a turning point for the Sudanese economy,” he said.
“Sudan only produces 34 percent of its electricity needs, so the door will be open for investment in this field, especially after U.S. sanctions are lifted,” he said.
Yasin revealed that the government was considering legislation allowing foreign companies to invest in electricity infrastructure and production for the first time.
The potential for increased trade and investment flows is already reflecting in the real economy, with the Sudanese pound strengthening to 16 per dollar from 19 before the sanctions announcement.
The pound trades at 6.8 per dollar in the official banking system. The minister said a stronger pound would tame inflation, which hit an annual rate of 30.47 percent in December.
Meanwhile, Sudanese banks have started to receive transactions from expatriates and foreign investors. The demand on investment has also surged and major companies like U.S. Chevron reemerged.
As part of Khartoum’s attempts to revive investments, the Sudanese Embassy in London told all concerned parties in the United Kingdom that Sudan is now ready to receive global financial exchange and cash monetary transactions.
Sudanese Ambassador to the UK Mohammad Abdulla Al-Toum stated that the results of these efforts are expected to appear soon and that an agreement to hold a session in Khartoum in cooperation with the British Importers Association is set to be held in February. The meeting aims at marketing and showcasing opportunities of trade exchange between both countries.
Sudan has also sought to work on reducing its debts, which reportedly reached USD47 billion; its Foreign Ministry has launched necessary communications to reduce foreign debts due in countries that will benefit from the sanctions’ lift.
The Minister of Foreign Affairs announced that EU countries promised to contribute in alleviating Sudan’s debts through the heavily indebted poor countries initiative (HIPC).
The minister said that the debt issue is a major concern after the sanctions’ lift.
A Bahraini delegation led by Mr. Mohammed Al Mutaweh, Board Member & CEO Group Headquarters of Al Baraka Banking Group, has also met with Dr. Hazem Abdul-Gadir Ahmed Babiker, governor of the Central Bank of Sudan and discussed the resumption of banking ties between both countries.