KHARTOUM (Sudanow) - As part of its endeavors for economic reform, the Council of Ministers has decreed the launch of a gold bourse in Khartoum, under the name “The Minerals Financial Market”, in a bid to control the precious commodity and benefit from its revenue, most of which is lost to smuggling.
Sudan is rated as Africa’s third gold producer after the republics of South Africa and Ghana, with official statistics putting the annual output at 100 tons of gold.
But unofficial estimates put Sudan’s gold production at double that figure, while what is exported through the official channels stands at a humble 22 tons. The rest is smuggled outside the country, mainly to Dubai, due to the low purchasing price inside the country and the fluctuating price of the national currency, the pound.
Unorganized traditional mining, that employs about two million workers, caters for about 75 percent of the country’s gold output. The remaining 25 percent is produced by the organized gold sector made up of concession companies, small mining companies and companies that treat gold mining leftover- or garbage.
Mr. Shawgi Azmi, the general manager of the stock exchange authority has extolled the Council of Minister’s decision establishing the Gold Bourse, saying it would guarantee the return of gold export revenue across the Sudanese banks, and will thus increase the country’s stock of hard currencies and boost the general economic wellbeing of the country.
Economic expert Mohammad Alnayir said the Gold Bourse is an organized market where this commodity is exchanged with transparency and at fair international prices for the miners, a matter that could stem smuggling because the gold will come voluntarily to the Bourse.
Another economist, Dr. Abdelazim Alamawy, has written in an article in the newspaper “The Independentarabia” that the founding of the gold bourse in Sudan will score big gains that transcend fair pricing of gold to the provision of financial instruments that can enable the Central Bank (The Bank of Sudan) to execute its monetary policies. He said the bourse can also help diversify the Central Bank’s reserve of assets and foreign currencies.
Amawy also said the move would provide the public with an opportunity to get exposed to valuable and safe financial instruments. For instance, the "Futures" contracts system can help jewelers and workers active in this sector sell future contracts to guard against the fluctuating gold prices.
Amawy said varied gold certificates can be displayed across the boure to the Sudanese expatriates who look for safe financial havens for their savings.
He said the technologically registered gold certificates can provide more security and transparency. This could help attract expatriates savings, at the same time keeping the gold inside Sudan, thus also fighting smuggling.
Mr. Abdelmonem Siddiq, president of the gold exporters consultative council is of the view that the launch of the gold bourse is impossible unless some requisites are met. The first is the unification of the national currency’s exchange rate against foreign currencies. For despite the government declaration unifying the exchange rate last April, there are three rates of exchange in the market at the moment. The question is: In what rate will the supply and demand be conducted in the Gold Bourse which is an open market not controlled by our Ministry of Finance or the Central Bank?
However, Mr. Siddiq is considering the launch of the Gold Bourse “good decision in case the government is able to monopolize gold and unify the national currency’s rate of exchange to win international markets in the manner that happens in the Dubai gold bourse where the Sudanese gold is being sold.
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