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Sudan Economic Growth to Slow After Oil Plunges More Than Half
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Nov 15, 2008 - 5:56:13 AM

Sudan Economic Growth to Slow After Oil Plunges More Than Half

By Heba Aly

Nov. 14 (Bloomberg) -- Economic growth in Sudan, sub- Saharan Africa's third-biggest oil producer, may slow to 6 percent next year after crude prices more than halved, Central Bank of Sudan Governor Sabir Hassan said.

The economy has grown an average of about 8 percent over the last decade, Hassan said in an interview yesterday in the capital, Khartoum. The International Monetary Fund estimates growth will slow to 7.7 percent next year from 8.5 percent in 2008, according to its Web site.

``We will be targeting only a 6 percent rate of growth, which is well below our 10-year track record,'' Hassan said. ``This is going to be a very difficult year. There are a lot of uncertainties, not only locally but internationally.''

Benchmark crude oil prices have fallen about 61 percent from a record $147.27 on July 11 because of concerns a global recession will cut demand. Sudan pumped 457,000 barrels of oil a day in 2007, up 38 percent from a year earlier, according to the BP Statistical Review of World Energy. Output in the north African country ranks behind Nigeria and Angola, sub-Saharan Africa largest producers.

Sudan is currently preparing its 2009 budget and since June, projected revenue has fallen 20 percent to 18 billion Sudanese pounds ($8.1 billion), Hassan said. Oil revenue makes up 49 percent of government revenue, he said.

``Under normal circumstances,'' the national budget is based on an oil price of $70 a barrel, Hassan said. This year, it is being based on a price of $50 a barrel. Sudan exports between 300,000 and 350,000 barrels of oil a day.

``The budget of this year is one of the most difficult budgets that we have ever seen,'' Hassan said.

Details of this year's 22 billion pound budget haven't been released yet because it hasn't been approved by parliament.

To contact the reporter on this story: Heba Aly in Khartoum via Johannesburg at [email protected].

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