Khartoum: Prime Minister Abdalla Hamdok hopes Sudan can wipe out its staggering $60 billion foreign debt bill this year by securing relief and deals at an upcoming Paris conference that could bring much-needed investment.
The seasoned UN economist-turned-premier took office at the head of a transitional government shortly after the 2019 ouster of president Omar Al-Bashir whose three-decade iron-fisted rule was marked by economic hardship, deep internal conflicts, and biting international sanctions.
In the past two years, Hamdok and his government have pushed to rebuild the crippled economy and end Sudan’s international isolation.
“We have already settled the World Bank arrears, those of the African Development Bank, and in Paris, we will be settling the International Monetary Fund arrears,” Hamdok told AFP at his office in Khartoum.
Arrears due to the African Development Bank were cleared through a bridging loan worth $425 million from Sweden, Britain and Ireland, while debts to the World Bank were paid off with a $1.1 billion bridging loan from the US.
“Paris also is home to the Paris Club, our biggest creditors... and we will be discussing debt relief with them,” Hamdok said.
Sudan’s debts to the Paris Club, which includes major creditor countries, is estimated to make up around 38 percent of its total $60 billion foreign debt.
Hamdok and top Sudanese officials will be attending Monday’s Paris conference along with by French President Emmanuel Macron, and World Bank and IMF representatives.
The aim is to draw investments to Sudan including in the energy, infrastructure, agriculture and telecommunications sectors.
“We are going to the Paris conference to let foreign investors explore the opportunities for investing in Sudan,” Hamdok said.
“We are not looking for grants or donations.”
Sudan was taken off Washington’s blacklist of state sponsors of terrorism in December, removing a major hurdle to foreign investment.
The government has also embarked on tough measures including subsidy cuts and introducing a managed currency float to qualify for an IMF debt relief program.
Though widely unpopular, the premier says the measures were necessary to move toward debt relief “by the end of the year.”
But many challenges still lie ahead.
His government has been pushing to forge peace with rebel groups to end conflicts in far-flung regions.
In October, it signed a landmark peace deal with rebels from the western region of Darfur as well the southern states of South Kordofan and Blue Nile.
Only two groups including one which wields substantial power in Darfur refused to sign the deal.
To Hamdok, the peace deal represents “50 percent on the road to peace.”
Efforts are underway to sign deals with the remaining groups, and talks with a faction of the Sudan People’s Liberation Movement-North (SPLM-N) are slated for later this month.
Hamdok acknowledged the slow pace of implementing the peace deal, but said Sudan is “steadily moving forward.”
In February, Sudan appointed three ex-rebels to the ruling sovereign council and announced a new transitional cabinet including seven ex-rebels.
“We have come a long way... and in my view the second stage of talks will go much faster.”
Simmering tensions with neighboring Ethiopia over a fertile border region and a gigantic dam on the Blue Nile pose another challenge.
Sudan PM hopes to settle $60bn foreign debt this year
https://arab.news/r3pmb
Sudan PM hopes to settle $60bn foreign debt this year
- ADB arrears paid with $425 million loan from U.K., Sweden and Ireland
- The Paris Club of major creditors make up around 38 percent of foreign debt
Dubai annual inflation eases to 3.36%
RIYADH: Annual inflation in Dubai experienced a modest decrease in February, marking a deceleration to 3.36 percent from January’s rate of 3.6 percent, according to official data.
This downturn is largely attributed to declines in the costs of transportation, as well as in the recreation, sports, culture, and tobacco sectors, a report by the Dubai Statistics Center highlighted.
Transportation saw a significant change during the month, going from -1.03 percent in January to -3.09 in February, a threefold deceleration.
The food and beverages sector, which holds a significant 11.6 percent weight in the overall index, also saw a reduction in its inflation rate, dropping to 3.08 percent from 3.69 percent in January.
This slowdown reflects a broader trend of easing price pressures in this vital category.
On the other hand, housing and water, as well as electricity, gas, and other fuels — sectors which hold above 40 percent influence on the overall index — witnessed a slight increase in their price growth rate, rising to 6.25 percent from 6.2 percent in January.
This increment, although marginal, indicates continued cost pressures in some of the core living expenses for residents in the emirate.
Furthermore, Dubai’s non-oil private sector maintained its growth momentum in February, with the emirate’s Purchasing Managers’ Index reaching 58.5, the highest since May 2019, a survey showed.
According to the PMI report by S&P Global, the significant growth in Dubai’s private sector was driven by an increased volume of new orders. This surge prompted companies to hire people at the fastest rate in the last eight years.
In January, Dubai’s PMI stood at 56.6, compared to 57.7 in December and 56.8 in November.
According to S&P Global, any PMI reading above 50 indicates growth in the non-oil sector, while readings below that figure signal contraction.
David Owen, senior economist at S&P Global Market Intelligence, said: “The Dubai PMI climbed to 58.5 in February, which is its joint-strongest reading since 2015 — matching May 2019 — and suggests that the Dubai non-oil economy is growing rapidly so far this year.”
He added: “The reading signals that the Dubai non-oil sector is one of the fastest growing worldwide according to global PMI data.”
The survey revealed that 36 percent of the respondents saw their output increase since the previous poll period, signaling the fastest upturn in 18 months.
Foreign investors will be treated as Saudis under Nitaqat
RIYADH: Foreign investors can now officially be classified as Saudis under the Nitaqat Saudization program, following the approval of the Ministry of Human Resources and Social Development.
This decision represents a provision within the classification system, wherein these individuals will be considered on par with citizens when calculating Saudization percentages, according to the Qiwa platform associated with the ministry, Saudi Gazette reported.
The system has outlined two categories of individuals treated as nationals within the Nitaqat program, including the children of local women married to non-Saudis and widows of residents who are not from the Kingdom.
Bank of Japan ends negative rates, farewells era of radical policy
TOKYO: The Bank of Japan ended eight years of negative interest rates and other remnants of its unorthodox policy on Tuesday, making a historic shift away from a focus of reflating growth with decades of massive monetary stimulus, according to Reuters.
While the move was Japan’s first interest rate hike in 17 years, it still keeps rates stuck around zero as a fragile economic recovery forces the central bank to go slow in any further rise in borrowing costs, analysts say.
The shift makes Japan the last central bank to exit negative rates and ends an era in which policymakers around the world sought to prop up growth through cheap money and unconventional monetary tools.
“The BOJ today took its first, tentative step toward policy normalization,” said Frederic Neumann, chief Asia economist at HSBC in Hong Kong, adding: “The elimination of negative interest rates in particular signals the BOJ’s confidence that Japan has emerged from the grip of deflation.”
In a widely expected decision, the BOJ ditched a policy put in place since 2016 that applied a 0.1 percent charge on some excess reserves financial institutions parked with the central bank.
The BOJ set the overnight call rate as its new policy rate and decided to guide it in a range of 0-0.1 percent partly by paying 0.1 percent interest to deposits at the central bank.
The central bank also abandoned yield curve control, a policy that had been in place since 2016 that capped long-term interest rates around zero.
But in a statement announcing the decision, the BOJ said it will keep buying “broadly the same amount” of government bonds as before and ramp up purchases in case yields rise rapidly.
The BOJ additionally decided to discontinue purchases of risky assets like exchange-traded funds and Japanese real estate investment trusts.
“We judged that sustainable, stable achievement of our price target came in sight,” the central bank said in a statement explaining the decision to dismantle former Governor Haruhiko Kuroda’s massive stimulus program.
With inflation having exceeded the BOJ’s 2 percent target for well over a year, many market players had projected an end to negative interest rates either in March or April.
In a sign any future rate hike will be moderate, the BOJ said in the statement that it expects “accommodative financial conditions will be maintained for the time being.”
The language compared with the more dovish guidance that was removed from the statement, in which the BOJ pledged to ramp up stimulus as needed, and keep increasing the pace of money printing until inflation stably exceeded 2 percent.
Japanese shares were volatile on Tuesday. The yen fell to almost 150 per dollar, as investors took the BOJ’s dovish guidance as a sign the interest rate differential between Japan and the US likely will not narrow much.
Markets are now focusing on Governor Kazuo Ueda’s post-meeting news conference for clues on the pace of further rate hikes.
The stakes are high. A spike in bond yields would boost the cost of funding Japan’s huge public debt which, at twice the size of its economy, is the largest among advanced economies.
An end to the world’s last remaining provider of cheap funds could also jolt global financial markets as Japanese investors, who amassed overseas investments in search of yields, shift money back to their home country.
Under previous Governor Kuroda, the BOJ deployed a huge asset-buying program in 2013, originally aimed at firing up inflation to a 2 percent target within roughly two years.
The central bank introduced negative rates and yield curve control in 2016 as tepid inflation forced it to tweak its stimulus program to a more sustainable one.
As the yen’s sharp falls pushed up the cost of imports and heightened public criticism over the demerits of Japan’s ultra-low interest rates, however, the BOJ last year tweaked yield curve control to relax its grip on long-term rates.
Oil Updates – prices slip as Russia lifts supplies, jet fuel demand stirs caution
SINGAPORE: Oil prices dipped on Tuesday due in part to the prospect of rising supply from Russia, slower-than-expected downstream demand in sectors such as jet fuel, and cautious trading ahead of the Fed’s decision on US interest rates, according to Reuters.
The Brent crude oil futures contract for May delivery slipped 15 cents to $86.74 a barrel as at 7:33 a.m. Saudi time, while US West Texas Intermediate prices fell 14 cents to $82.02. The WTI April contract, with expires tomorrow, fell 15 cents to $82.57.
Both benchmarks reached four-month highs in the previous session, buoyed by lower crude exports from Saudi Arabia and Iraq and signs of stronger demand and economic growth in China and the US.
Regarding Russia, supply concern stemming from increased exports following Ukrainian attacks on the country’s oil infrastructure continued to pressure prices downward.
“Attacks will likely reduce Russian crude runs by up to 300 kbd (thousand barrels per day), in addition to scheduled maintenance closures ... Lower primary runs, however, would lead to higher crude oil exports, helping Russia to simultaneously achieve output cuts while keeping exports flat,” JP Morgan analysts wrote in a client note.
Russia will increase oil exports through its western ports in March by almost 200,000 barrels per day against a monthly plan for 2.15 million bpd, while on a daily basis, shipments will increase by 10 percent compared to its initial plan for March, Reuters calculations showed.
Prices were weighed down by uncertainty about how US interest rates would pan out ahead of the Federal Reserve meeting on March 20 at 9:00 p.m. Saudi time.
“The market may be in consolidation mode awaiting signals on rate cuts from this week’s FOMC meeting,” said DBS Bank energy sector team lead Suvro Sarkar in an email, adding: “Oil prices are already up quite a bit over the last two weeks, factoring in higher geopolitical risk premium after the attacks on Russian refineries ... There could be some profit-taking at these levels as we doubt price movements above $85/bbl will be sustainable in near term for Brent.”
On the demand side, analysts were slightly cautious on demand growth coming from the jet fuel sector ahead of the summer traveling season in the third quarter of the year.
Global jet fuel prices are likely to be “higher by 5.4 percent over our previous forecast to $111/bbl as soft demand is expected to give way to peak summer travel and stronger prices,” BMI analysts wrote in a client note.
“However, a global economic slowdown will temper consumption of air travel and weigh on jet fuel prices limiting price upside,” they added.
China discovers 100m tonne oilfield in Bohai Sea
- Chinese state oil company raises its 2024 production target by about 8 percent
RIYADH: China’s CNOOC Ltd. has made a major oilfield discovery in the Bohai Sea, adding over 100 million tonnes of oil equivalent proved in-place volume, the state-owned oil and gas giant said on Monday.
The discovery was made at the Qinhuangdao 27-3 oilfield located in the north-central waters of the Bohai Sea, the company said in a statement. The field has been tested to produce about 742 barrels of crude oil per day from a single well, it added.
Earlier in the month, CNOOC announced the discovery of a new reserve in the South China Sea, which contains over 100 million tonnes of oil equivalent proved in-place.
The announcements come as CNOOC invests heavily in the development of China’s offshore oil and gas reserves as part of a broader push to offset declining output from aging onshore fields.
The oil and gas giant in January raised its 2024 production target by about 8 percent to a record 700 million to 720 million barrels of oil equivalent, citing higher annual capital spending, with production reaching about 675 million boe in 2023.
Industrial output
China’s factory output and retail sales beat expectations in the January-February period, marking a solid start for 2024 and offering some relief to policymakers even as weakness in the property sector remains a drag on the economy and confidence.
Monday’s data join recent better-than-expected exports and consumer inflation indicators, providing an early boost to Beijing’s hopes of reaching what analysts have described as an ambitious 5 percent gross domestic product growth target for this year.
FASTFACTS
• The discovery was made at the Qinhuangdao 27-3 oilfield located in the north-central waters of the Bohai Sea.
• The field has been tested to produce about 742 barrels of crude oil per day from a single well.
• The announcements come as CNOOC invests heavily in the development of China’s offshore oil and gas reserves.
“China’s activity data broadly stabilized at the start of the year. But there are still reasons to think some of the strength could be one-off,” said Louise Loo, China economist at Oxford Economics.
Industrial output rose 7 percent in the first two months of the year, data released by the National Bureau of Statistics showed on Monday, above expectations for a 5 percent increase in a Reuters poll of analysts and faster than the 6.8 percent growth seen in December. It also marked the quickest growth in almost two years.
Retail sales, a gauge of consumption, rose 5.5 percent, slowing from a 7.4 percent increase in December but beating an expected 5.2 percent gain.
The eight-day Lunar New Year holiday in February saw a solid return of travel, which supported revenue of tourism and hospitality sectors. That also led to a 3 percent growth in oil refinery throughput to meet strong demand for transport fuels.
Property sector
A protracted crisis in the property sector, a key pillar of the economy, remains a major concern for policymakers, consumers and investors.
Monday’s data offered little relief on that front with declines in property investment narrowing in January-February, but still far from levels of reaching stability.
The frailty of the sector was highlighted by the poor demand. Property sales by floor area logged a 20.5 percent slide in January-February from a year earlier, compared with a 23 percent fall in December last year.