Sudan Suspends Funds of Export Companies Over Dollar Crunch

Sudan Suspends Funds of Export Companies Over Dollar Crunch (News Central TV)
General Abdel Fattah al-Burhan, the head of Sudan’s ruling military council (Photo by ASHRAF SHAZLY / AFP)

The central bank of Sudan has frozen accounts of more than 200 exporters for failing to deposit revenues locally, as it seeks to ease a critical squeeze on the foreign currency after donors suspended billions of dollars in assistance.

Sudan’s fragile economy is being further weakened after Europe, the U.S., and other financial institutions such as the World Bank blocked $3 billion in financial support this year for electricity, irrigation, and education projects among others following October’s military coup. Exporters expatriating their profits has further strained the Sudanese pound.

Sudanese Minister of Finance Gibril (Jibril) Ibrahim speaks during a press conference in the capital Khartoum on February 21, 2020. (Photo by ASHRAF SHAZLY/AFP )

A total of 208 businesses, mostly in the agricultural sector had their local accounts frozen on Feb. 17, a former senior civilian official confirmed the measures.

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“We decided to block the bank accounts of the listed companies below because they didn’t commit to bank the revenues from their exports during past periods,” the central bank said.

Finance Minister Gibril Ibrahim didn’t immediately respond to a request for comment, while officials at the central bank couldn’t be reached. Last month, Ibrahim said on state radio the government would take “appropriate measures” to compel exporters to cash their revenues domestically.

Sudan’s finances are coming under increasing pressure nearly four months after the army derailed a promising democratic transition that was beginning to show signs of economic progress, including narrowing the gap between the official and black-market rates for the pound.

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The local currency has again begun to weaken lately, reaching almost 450 pounds to the dollar on the informal market compared to the official exchange rate of 443 pounds. A growing black market starves lenders of both foreign and local currency.

The North African country, which looked like rejoining global markets after the 2019 ouster of dictator Omar al-Bashir, has revised down its growth target to 1.4% for 2022, and is struggling to fund planned expenditure of 3.7 trillion Sudanese pounds.

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