(4 minutes read)
- Relaxed rules enable private traders to export 70% gold produced in the country
- Changes welcomed by the gold miners; but wants waiver for 30% sales to the central bank
 Sudan, the third-largest producer of gold in Africa after South Africa and Ghana, is set to change its gold export rules by allowing private traders to export gold. This measure would help the government stem gold smuggling, which in turn can help beef up its coffers. Till date, Sudan’s central bank was the only agency legally allowed to export gold and buy the metal from the small-scale miners. The change welcomed by the private gold traders and miners alike is expected to help the cash strapped country to up its foreign exchange inflows.
An obscure private company founded in 2015, al-Fakher, is the first to take advantage of the new regulations. It has exported an initial 155 kg after the announcement of the changes on 1st January 2020. Analysts say that the government was forced to take the decision because of the large scale smuggling which has denied the government treasury the much-needed tax receipts collected from the exporters. Sudan is now striving for a three –year transition by adopting reform measures and bringing the private sector on focus to boost its economy. Presently, the country has a military-civilian power-sharing deal struck after President Omar al-Bashir was ousted last year.
Sudan produced last year (2018) an estimated 93 tons of gold  according to its Energy and Mining Minister Adil Ibrahim. While the country is trying its best to up the production, it is imperative to plug the loopholes, which denied the African nation its tax proceeds..
According to the new regulations, private mining companies could now export up to 70% of their production. But they are mandated to deposit proceeds of the exports in the local banks. The reaming 30% of the gold mined, they have to sell to the central bank. There are restrictions on keeping the foreign exchange earned, such as the companies would also have to sell any foreign currency they received to the central bank at the official exchange rate. There is a huge disparity between official exchange and informal ( black market) rates.
While the official rate now is 45 Sudanese pounds to the dollar, the black market rate is 88 pounds to the dollar. The gold traders, while welcoming the move of the government said that the wide disparity between the official and black-market rates would act as a disincentive for the traders. They urged the government to maintain a sort of parity between the two rates. The other demand of theirs is to allow for selling the entire gold production and not 70% as stipulated by the recent regulation. The sale of 30% of the gold to the central bank is making the new relaxation to some extent unattractive. The traders feel that the official exchange rate is unrealistic. Earlier, the central bank bought gold at a discounted rate as compared to the international price. This has led to an estimated 70-80% of the total production of gold being smuggled out of the country. The large scale smuggling denied the country the huge revenue by way of tax receipts.
