Former Rebel Goes for Gold in Bid to Turn Around Sudan’s Economy
(Bloomberg) -- Sudan wants to lure private investment into its gold industry to help revive an economy shattered by years of conflict and dictatorship, Finance Minister Gibril Ibrahim said.
The former rebel leader who once fought to overthrow President Omar al-Bashir has been implementing a slew of economic changes since becoming finance chief in February. Sudan is edging toward clearing the bulk of its roughly $60 billion foreign debt and settling arrears with the International Monetary Fund.
Other challenges remain for the transitional government ruling in the wake of Bashir’s 2019 ouster, including holding elections, loosening the military’s stranglehold over key industries and taming informal gold production, in which more than 2 million miners participate around the country.
“Now we are looking for more companies to invest in different concessions” to move out artisanal miners and ensure the government is the main buyer of gold, Ibrahim said in an interview in the capital, Khartoum. He said there had been “many” applications, without identifying any firms.
“We are seeing only around 20% from our gold production,” Ibrahim said. “The rest of it is smuggled over the borders, sometimes even through the airport.”
Sudan’s state mining firm in January estimated 2020 gold production at 35.5 tons, up from 27 tons the year before. It described higher figures for previous years as fabrications by Bashir’s government.
Ibrahim, 65, who leads an armed group that once fought in the western region of Darfur, is a linchpin of the interim government that combines civilians, the military and insurgents in a bid to establish peace in a nation wracked for years by rebellions and periodic unrest.
“The real challenge is to convince those who ruled the country for decades to accept the change and accept that they are getting a lesser portion of the resources,” Ibrahim said. “The military themselves are not happy with others coming in.”
Disgruntlement isn’t confined to the armed forces, with public anger rife over shortages of fuel and other staples, an inflation rate that’s running at more than 360% and a depreciating currency. Sudan late Tuesday raised gasoline and diesel prices to levels that reflect import costs, effectively ending state subsidies.
It will take time to turn the economy around and improve living standards, said Ibrahim, who heads the Justice and Equality Movement. The rebel group was founded in 2000 by Ibrahim’s brother Khalil, who was killed in a government air strike almost a decade ago, and almost seized control of Khartoum in 2008 before being repelled.
The government is targeting development of infrastructure, energy and mining projects in its drive to spur economic growth and create jobs. Finance officials are due in Saudi Arabia this month for further talks on a planned $3 billion joint investment fund.
$10 Billion Investment
The governments will “create the joint investment mechanism and discuss the projects” of interest to both sides, according to Ibrahim. Saudi Crown Prince Mohammed bin Salman expressed interest in raising the total commitment to $10 billion, the minister said.
Ibrahim also wants to lure private capital by selling stakes in some of Sudan’s 650 state-owned companies, 200 of which belong to the military. Loss-making ones should be turned around and become more tightly controlled, he said.
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