On Tuesday, June 16th, Sudan News Agency (SUNA) said the government will now allow private investors handle all gold exports, in a move that significantly opens up the sector and takes gold business out of state hands.
The approval was agreed on by an economic committee meeting headed by Sudan’s top military commander, Mohamed Hamdan Dagalo and Prime Minister Abdalla Hamdok.
Committee members agreed to put a ban on government bodies from exporting gold and open the trade to private firms provided they meet requirements of paying taxes and royalties.
“Traders would now be able to export gold through Khartoum international airport and the government would crack down on other routes used for smuggling,” SUNA said.
Prior to this agreement, the Sudanese government in January had opened gold exports to private companies but limited private mining firms to exporting 70 percent of their output with the rest sold to the central bank.
Exporters were required to sell all foreign exchange export proceeds to the central bank at the official exchange rate, which was at that time about 45 Sudanese pounds to the dollar, equivalent to about half the black market rate.
The new policy now restricts the central bank from buying gold entirely, except to increase official reserves in which case it must be purchased at the local gold market, according to SUNA.
Sudan is making attempts to diversify its economy by focusing on the mining and agricultural sectors. The state wants to stabilize its economy and make up for the loss of foreign exchange earnings due to South Sudan’s secession about a decade ago.
The United States (U.S.) Geological Survey places Sudan as Africa’s third biggest gold producer after South Africa and Ghana. The country produced 93 tonnes of gold in 2018, according Energy and Mining Minister Adil Ibrahim.
However, in recent times, the mining sector has been a target for smugglers. For years, the central bank had a monopoly on exports, buying gold locally at fixed prices at collection sites nationwide, fueling illegal trading.
The government has been trying to crack down on gold smuggling and generate more foreign currency from the natural resource. This latest move should go a long way in achieving that objective as well as help generate much-needed income to fix the ailing economy, experts say.