March 5, 2020 / 2:34 PM / a month ago

UPDATE 1-Sudan says needs foreign currency for strategic commodities despite Gulf aid

(Adds details and background)

CAIRO/KHARTOUM, March 5 (Reuters) - Sudan is in dire need of foreign currency to continue buying strategic commodities, especially wheat, after its reserves of the grain dipped to a mere seven days in December, Finance Minister Ibrahim ElBadawi said on Thursday.

Bread shortages, caused by difficulties in raising hard currency to import wheat, triggered the mass protests which led the military to end 30 years of rule by Islamist president Omar al-Bashir in April.

The country has since received shipments of wheat and gasoline as aid from its allies in the Gulf, the United Arab Emirates and Saudi Arabia, but has had to make extra purchases to cover its needs amid a crippling lack of foreign currency.

In December, its central bank struggled to secure $28 million needed to clear a 50,000 tonne cargo of wheat in port and had to turn to Al-Fakher, a little-known private company founded in 2015, to secure the funds in exchange for Sudanese pounds, ElBadawi told a news conference in Khartoum.

The funds were conditioned upon the purchase of local gold for export, ElBadawi said, which the company did by selling an initial 155 kg.

“We were in dire need of that ship to provide wheat to cover the country’s needs until the end of December, when our remaining wheat reserves were no more than seven days,” he said.

The civilian government Elbadawi is part of has taken over for three years under a power-sharing deal with the military.

It has drawn slightly more than half of $3 billion in support for imports of wheat and fuel offered by its two Gulf allies in April, he told Reuters in November, with the remaining funds expected to be disbursed this year.

Sudan also continues to subsidize bread and fuel, an added strain on the government’s finances, and has said it aims to continue bread subsidies but to improve how they are targeted.

In crisis since losing most of its oil wealth with the secession of the south in 2011, the country has experienced an acute shortage of foreign currency. The dollar rose to almost twice the official rate against the Sudanese pound on the black market this week. (Reporting by Mahmoud Mourad and Nadine Awadalla in Cairo and Khalid Abdelaziz in Khartoum; Additional reporting by Nafisa Eltahir in Dubai; Writing by Nadine Awadalla; Editing by William Maclean and Philippa Fletcher)

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