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New Sudanese currency to circulate by mid-2006

Sudan will introduce a new free-floating currency during the first half of 2006, Finance Minister al-Zubeir Ahmed al-Hassan said on Sunday, urging donors to help fund the $100 million cost of implementation.

He also said he expected oil exports to earn about $7.8 billion in 2006, compared to $3.7 billion this year, as another pipeline comes on stream, increasing production by 200,000 barrels per day (bpd) to about half a million.

"The cost of introducing the (new) Sudanese pound will be about $100 million [...]," Hassan told reporters in Khartoum. "According to the peace agreement, the donor countries have promised to provide the necessary funding for the introduction of the new Sudanese pound."

He added that the timetable for the new currency depended on the donor money.

Sudan formed a new coalition government last month following a January peace deal to end the civil war in its south, which was Africa's longest and claimed 2 million lives. The deal also envisages wealth sharing, democratic transformation and a referendum on southern secession in 6 years.

The minister said the value of the Sudanese pound would be determined by market mechanisms. The pound will replace the Sudanese dinar, which currently trades at around 240 to the U.S. dollar.

Oil revenues

Hassan said oil revenues would make up around half of Sudan's budget for 2006, the first since the formation of the new coalition government.

"According to the budget, petrol exports for next year will earn about $7.8 billion, but not all of this will go to the government of Sudan," he said.

He added half the cash would go on the cost of extracting or refining oil, and to foreign companies who had invested in the industry.

The amount was calculated on a oil price of $40, he said. Oil prices are currently around $66. Sudan produces around 320,000 bpd of crude.

Hassan said at a ministerial meeting of many of the world's wealthiest nations in Washington last week that there was "increased sympathy" towards the idea of cancelling Sudan's debts to the World Bank and the International Monetary Fund (IMF).

Sudan had hoped to be among 18 highly indebted nations who had their debts forgiven earlier this year.

Sudan, with a total external debt of around $24.1 billion, had its IMF and World Bank membership revoked in 1997 for failing to honour repayments.

But Hassan said some countries, like Britain, had said debt relief was conditional on resolving a separate 2-1/2 year-old conflict in Sudan's western Darfur region. That conflict has killed tens of thousands and prompted the United States to level accusations of genocide at Khartoum, a charge the government denies.

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