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Exclusive: Sudan needs up to $ 10 billion to rebuild the economy

UNITED STATES, WASHINGTON (OBSERVATORY) — Sudan needs $ 8 billion in foreign aid over the next two years to cover imports and help rebuild the economy after months of political unrest, Sudan’s new prime minister said on Saturday.

Hamdok, who was sworn in three days ago to head the interim government after the ouster of former President Omar al-Bashir, said another $ 2 billion was needed in the next three months.

“Sudan urgently needs one to two billion dollars, which must be available as a cash reserve in the central bank to help stop the deterioration of the pound’s exchange rate,” he said.

The 61-year-old economist, who has previously been executive secretary of the UN Economic Commission for Africa (ECA), said he had started talks with the IMF and the World Bank to discuss restructuring Sudan’s debt and was reaching out to friendly countries and funding bodies on aid.

“We have started contacts with donors, some parties in the World Bank, the International Monetary Fund, the African Development Bank and the size of Sudan’s debts about $ 56 billion, but it is necessary to reach first understandings on the benefits of sovereign debt, which amounts to about $ 3 billion because the previous regime was unable to repay.” .

“Access to these understandings will open the way for Sudan to benefit from debt relief programs, debt scheduling, grants and loans,” he said.

Rising public anger over shortages of food, fuel and hard currency triggered mass demonstrations that eventually forced Bashir to step down in April.

Hamdok, in his first interview with a foreign media since taking office, said he was in contact to do so and the central bank’s reserves were weak and very low.

However, Handouk said, “There will be no imposition of the prescription of the IMF and the World Bank on Sudan.”

Regarding government support for bread, fuel, electricity and medicine, which is politically difficult, Handouk said, “Lifting subsidies is a central issue in Sudan and we will try to benefit from the experiences of some countries“.

He also said he was in talks with the United States to remove Sudan from its list of state sponsors of terrorism. Putting Sudan on the list has left it isolated from the international financial system since 1993.

There was no comment from Washington, the International Monetary Fund or the World Bank.

* Devaluation
Sudan has been in economic turmoil since losing most of its oil production in 2011, when South Sudan seceded after decades of civil war.

Sudan has devalued the pound several times but failed to prevent it from collapsing. The dollar is currently 65 pounds on the black market against the official rate of 45 pounds.

“We will work to unify the exchange rate of the pound and the exchange rate to be managed through the flexible exchange rate managed,” Handouk said.

He said Sudan needed to restore confidence in the banking system.
Hamdok, who studied agricultural economics, worked for the African Development Bank and more recently as a special advisor at the Trade and Development Bank of Ethiopia. He said Sudan needed to tap its agricultural potential.

Sudan is rich in agricultural resources, but investment has been hampered in the sector for decades due to tax hikes, corruption and mismanagement.

“We want to express the Sudanese economy from an economy based on consumption and import to a productive economy and stop the issue of exporting Sudanese exports such as livestock and agriculture as raw materials and we will seek to manufacture them to add preferential value,” Handouk said.

He also said he wanted to focus on building peace in a country that has seen conflicts in various parts of the country and endured a civil war that ended with the secession of the south.

“Stopping a war in which spending accounts for 70 percent of the budget will create a surplus that can be invested in production, especially agriculture, livestock and related industries,” he said.

Shortly after Bashir was ousted, the UAE and Saudi Arabia pledged $ 3 billion in aid to Sudan, in the form of a $ 500 million central bank deposit Sudan already received as well as fuel, wheat and medicines.

Army commanders who toppled Bashir took charge and after months of wrangling and more violent protests, agreed to form a transitional body of civilians to pave the way for elections within three years.

Many hope Hamdok will be able to lead Sudan during the interim period, but some opposition members and analysts fear the power-sharing deal may fall short of expectations in a country dominated by the Islamist-backed army for decades.

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