Foreign Currency Mobilization in Sudan :executive summary

Abstract

This note argues that increasing the minimum paid-up capital of the Sudanese banks, enhancing the ability of the banking sector to attract remittances through the formal channels and amending the Mineral Resources and Mining Act of 2015 can generate foreign capital inflows to Sudan in the range of USD 2.5-3.3 bn in 2020.Sudan’s Balance of Payments (BoP) recorded a deficit of USD16.8 bn which puts tremendous pressure on the exchange rate to depreciate since Sudan continues to suffer from a severe shortage of foreign exchange. The trade balance in Sudan has recorded a growing deficit since the early 1970s. The reason for this is sluggish export performance and escalating import growth. Both the trade balance and the current account take the same trends, indicating that the trade deficit was a main driving force of the current account deficits. In this note, it identifies and estimate the foreign capital that the Sudanese government can tap from three sources in the short term. It examines the current level of the minimum paid-up capital of the Sudanese banks, the potential of the remittance and current bottlenecks, and Sudanese government returns from the existing mining industry.