Proposals Regarding Gold Exports

Sudan Events – Rehab Abdullah

Banking expert Dr. Louay Abdul Moneim described the advance payment method adopted by the Central Bank of Sudan as excellent, and in his interview with Sudan Events, he considered it to limit the non-return of export proceeds. However, he saw that it is best for gold exports to deposit raw gold of the same value to be exported.
Louay explained that with regard to gold exports, after deducting the huge returns and zakat, the government allowed the concession companies to keep 70% of the proceeds exported abroad after the government bought 30% of the raw gold at the central bank price, which he considered confirms that there is no hope for the concession companies, except in the fact that some of them represent the interests of countries that support Sudan in the Security Council and support them with weapons, most notably Russia, while the rest represent the interests of well-known capitalists, especially since the significant percentage of returns does not exceed 7%, pointing out that the government’s share of the net profits is very small, amounting to 30%, indicating that Companies’ books and budgets do not reflect reality and exaggerate production costs.
Louay criticized Sudan’s waste of mineral wealth and added, “We have not heard of a country in the world that wastes its wealth like Sudan in this way.”
Louay added that the government buys 85% production from small companies and Karta companies and allows them to export 15% and return the export proceeds and sell them to the Bank of Sudan at the price it sets if their owners do not want to employ them in importing or selling them to the relevant bank within a specific period of time so that they are not exposed to penalties. Louay pointed out that the problem lies in the fact that small companies are not able to pay the value of the exported shipment in advance as a guarantee for the return of export proceeds due to their weak capabilities, in addition to the fact that the price at which the Bank of Sudan buys the proceeds is lower than the parallel market price, so they sell their production to franchise companies at the market price. The latter donot show this in its books, so that they do not have to sell 30% to the Bank of Sudan, and the result is that small companies’ gold is smuggled along with the load of gold produced by concessionary companies and allowed to be exported, and thus gold is smuggled under the watchful eyes of the authorities, who initially neglected it. It is in the interest of Sudan and does not benefit from gold production, and this is clearly evident in the government’s reluctance to produce and extract itself and its preference to collect from private mining, which constitutes 80% of production.
Louay proposed offering raw gold as a guarantee instead of an advance payment for gold exports, while purchasing the gold proceeds of small companies and card companies at the price of the dollar in the parallel market. He stressed that this would limit gold smuggling and increase the Bank of Sudan’s gold reserves, and he expected a rise in gold. The value of the pound against the dollar will gradually increase because gold will be a guarantee for internal and external loans that will finance development and increase production, and thus increase the purchasing power of money. However, he warned that it is very important after the end of the war to review the agreements with concessionary companies, except those concluded with the great purchasing powers that will not accept them what they considers their right, they obtained in a time of heedlessness, disagreement, and fragmentation, so that a new war would not break out.