Economic Experts: Breaking Gold Monopoly Boosts Exports
Sudanhorizon – Haala Hamza
The Gold Exporters Division and numerous analysts and experts have welcomed the decision adopted by the Central Bank of Sudan (CBS) on Wednesday to end the gold export monopoly.
The Gold Exporters Division has expressed satisfaction with the decision, considering it a “return to what is right and virtuous.”
In a statement issued on Thursday, signed by the division’s head, Abdul-Moneim Al-Siddiq, the exporters have acknowledged that the abandoned monopoly by Central Bank of Sudan over gold exports had been a misguided experiment.
They explained that the government itself admitted that gold exports during the first nine months of the current fiscal year reached 53 tons, valued at six billion dollars, while the revenue in the state coffer did not exceed one billion dollars, confirming a significant loss in export revenues amounting to five billion dollars.
The statement suggested that influential companies had unfairly benefited from these five billion dollars despite the clarity of the gold export policies.
The division has underlined that it had issued a statement warning against the squandering of the country’s resources to benefit influential and politically connected groups who have managed to circumvent gold export policies and seize, profit from, and make gains out of these five billion dollars.
In its statement, the Division demanded that the Bank of Sudan takes over the export process itself so as to remove these dubious hands from gold exports, ensuring that the country benefits from all gold export revenues.
It further asked that all should receive equal treatment, without favoritism, specialization, or exceptions for anyone, regardless of their position or title, which would undermine the experiment.
It called for policies to avoid linking gold exports to the import of any commodity, no matter how important, to prevent the experiment from failing.
Analysts, speaking to Sudanhorizon, have meanwhile predicted a surge in gold exports and an increase in revenues in the coming period.
Atef Abdel Qader, a leader in the Gold Division, described the decision as “a sound one”.
The Central Bank of Sudan called for stricter enforcement of advance payment requirements, a halt to deferred payment facilities granted to certain entities, and a resolution to the chaos surrounding exports without proceeds.
Abdul Qadir anticipated that the decision would lead to a significant and active increase in gold exports in the coming period.
He explained the numerous drawbacks of the recent monopoly decision last September, which resulted in increased smuggling and a decline in the supply of gold in Port Sudan markets from 100-150 kilograms per day to 3-5 kilograms, with some gold shipments even disappearing altogether.
He stated that the Sudanese Mineral Resources Company and official bodies were aware of this situation through daily reports received from gold examination laboratories.
The Central Bank’s circular stipulated that banks are permitted to export gold through any legal entity after fulfilling all export procedures, provided that the export is conducted according to stock exchange prices and via advance payment and letters of credit.
It also mandated that proceeds from the export of free gold and gold from mining waste companies be held in a foreign currency bank account in the exporter’s name, and that these proceeds remain in the export account for 21 days.
It hinted at purchasing the gold if the specified period for holding the proceeds exceeds the Bank of Sudan’s stated purchase price, as announced on the date of its deposit into the export account.
Former Central Bank Conultant Anwar Mohamed Hamed Elias told Sudanhorizon that breaking the gold monopoly would yield positive results by opening up the gold market to local investors, thus providing liquidity and increasing inflows, as well as boosting public revenues from taxes and various fees, which would contribute to funding essential services.
Elias explained that treating gold as a safe haven would alleviate pressure on the local currency and stabilize its exchange rate.
He called for reducing government restrictions on gold trading and investment to attract more foreign capital, emphasizing the importance of trading gold according to global market prices to minimize losses due to smuggling.
He urged official bodies to utilize gold to build reserves and back the currency, thereby achieving monetary stability.
Academic analyst Mohamed Al-Nayer described the decision to break the monopoly as a phased and temporary measure. He told Sudanhorizon that the current circumstances facing the Sudanese economy dictated the move. He urged the government to establish a gold exchange in Khartoum at the beginning of next year, arguing that it is the fundamental solution for gold trading through an organized market that allows for exports from within the country, thus curbing smuggling and increasing gold’s contribution to the economy.
Al-Nayer stressed that the success of the decision hinges on achieving unrestricted cooperation between the Bank of Sudan, the Ministry of Finance, and exporters.
He also emphasized the need to classify exporting companies and prioritize the most serious ones for future dealings. Furthermore, he called for a commitment to transparency between companies and the government regarding export proceeds and their allocation, with government support to meet the import needs of essential goods.
He added that the exchange would stabilize policies, reduce conflicting decisions by the Bank of Sudan regarding monopolizing or breaking the export monopoly in favor of companies, and attract gold at attractive prices from miners and neighboring countries.
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