Will traditional gold mining replace outgoing Southern oil revenues for the north in case of separation?
28 December, 2010
Khartoum (Sudanow) - Sudan’s external trade performance improved during the third quarter of 2010, which led to increasing the national revenues in foreign currency, according to a report by the central, the Bank of Sudan, compiled in November, published this month 2010.
The report states that total revenues of non-oil exports have amounted to around 1, 466, 84 million U.S Dollars, while gold constitutes 61 percent of the non-oil revenues but is expected to rise to over one billion Dollars by end of the current fiscal year, with the increase in traditional mining methods.
The report shows Sudan gold prices hit 40.33 Dollars a gram during the first, second and third weeks of November 2010, which spurs the government into encourage exploration processes at projected areas in Nahral-Nil, North Kordofan, Blue Nile, Red Sea and the Shamalia States.
Gold has recently come to the forefront as a source of income for many private individuals and companies and contributes to providing employment for a considerable number of people in addition to the efforts of the Ministry of Mining to sign agreements for gold exploration in commercial quantities in a number of states. This is likely to contribute to be a resource of foreign currency to fund development and support stability of exchange rate.
The central bank is expected to adopt a package of measures and decisions to regulate gold trade and build a gold reserve to reduce smuggling operations and contribute to providing further foreign currency resources for the country in the next phase.
According to the report, gold comes at the top of the non-oil revenues, and compared to other non-oil revenues, it would be found that gold has achieved $899.97million followed by sesame, $169.02 million, sheep $151.31, gum Arabic $60.17 million, Cotton $49.09 million, others $40.66 million, camels $25.62 million, scrap $21.19 million, leather $16.75 million, ethanol $11.63 million, Meacham $11.48 million and Chrome $9.95 million.
In contrast, food accounted for 24.46% of the total imported goods which its revenues are estimated at about $8985.12 million during the period from January to October this year.
The central bank, in its report, says efforts should be coordinated to replace the agricultural and industrial imports through a strategy based on production for exportation and to establish a manufacturing base and develop the infrastructures to make use of the surplus in the value-added tax through the agricultural and industrial development; and to expand the base of exports to neighboring countries’ markets, enhance the economic ties with emerging countries and encourage the trade and investment movement.
As part of its monetary and funding policy for 2011, the central bank focuses on achieving economic stability by containing the inflation and preserving a stable exchange rate.
Nowadays, the central bank is embarked on discussions with the concerned authorities where it can be observed that the bank’s new policy focuses on controlling the demand for foreign currency, developing its resources and rationing its uses together with providing incentives to financing the productive sectors.
The average exchange rate of the U.S Dollar against the Sudanese pound has jumped in the Central Bank of Sudan from 2.366 pounds in October 2010 to 2.377 pounds in November.
In the same context, the bank issued a number of important amendments to the regulations governing the foreign currency and directed the banks and exchange windows to apply them to attract foreign currency to be purchased in the organizing market with satisfactory prices for the sellers. The new regulation included a new incentive mechanism for whoever sells foreign currency to the banks or exchange windows, whether from the export proceeds or other resources.
In its funding policy, the bank directed for financing the productive sectors such as agriculture and industry by reducing the legal reserve of the committing banks to this and putting deposits for the most active banks in this filed besides providing incentives for the banks which expand in provision of microfinance and funds of social dimension after specifying preferable rates for that in the new funding policy. The aim is to support the weak sectors in the society, provide jobs opportunities and fight poverty, matter which lead to continuation of relevant increase in the banking funding for all the productive sectors together with an increase in the flow of funds for all sectors in both local and foreign currency during October 2010. The local trade funding reached the highest exchange rate of %14.4, followed by the imports funding which registered %12.7, the agricultural sector %12.4 and the industrial sector %9.4.
The report indicates the need to take measures by the Central bank in finance policy for 2011 which should direct the resources towards the productive sectors in line with a well-studied plan and specific incentives that require a great deal of cooperation among the different commercial banks. It said it is important to make use of the opportunities of the global food crisis and meet the challenges of providing the necessary funding for the various agricultural activities to better utilize the available fertile agricultural lands and water.
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