June 13 (Bloomberg) -- Sudan’s economy grew by 3 percent last year, compared with a government target of 6 percent, Central Bank Governor Mohamed Khair al-Zubair said.
Growth has slowed from 11.3 percent in 2006 and 10.2 percent in 2007 as the African country prepares for the secession of oil-rich Southern Sudan on July 9. The country’s economy grew by 4.5 percent in 2009, the International Monetary Fund said in its October Regional Economic Outlook report.
Money supply rose by 25 percent in 2010, compared with the target of 22.5 percent, as inflation increased to 15 percent in the year against the targeted 9 percent, al-Zubair told parliament in Omdurman, a suburb of the capital, Khartoum.
“Foreign investment is still flowing into the country, even though it declined last year,” deputy central bank Governor Badr Al-Din Abbas said today. He declined to provide figures. In November, former central bank Governor Sabir Hassan said foreign direct investment had almost halted due to political instability.
Clashes in recent weeks along the border between northern and Southern Sudan have raised concerns about a resumption of the two-decade civil war that ended with a 2005 peace agreement between the north and the south.
Sudan’s budget deficit was equivalent to about 3 percent of gross domestic product in 2010, Abbas said today. The budget for this year, which foresees a 3.2 percent deficit, is based on a target of 5 percent growth and an inflation rate of 12 percent, Finance Minister Ali Mahmoud Abdel Rasoul said in November.
The Sudanese government’s May 1 Islamic bond sale was the third consecutive issue that failed to raise the full amount sought within the subscription period. The government relies on sukuk as one of its main forms of borrowing. The country is denied access to international markets as it has been subject to U.S. economic sanctions since 1997.
Land-locked Southern Sudan, which will assume control of about 75 percent of Sudan’s current oil production of 490,000 barrels a day at independence, will pay the north fees for the use of pipelines and facilities at Port Sudan on the Red Sea to export the crude, Idris Abdelgadir, state minister for presidential affairs, told parliament June 8.
Northern and Southern Sudan have started “pure direct commercial negotiations” to discuss usage fees, he said. Under the peace accord, northern and Southern Sudan currently split proceeds from oil pumped in the south on a 50-50 basis.
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