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Sudan central bank governor resigns ahead of secession

By Reuters
Sunday, March 6, 2011 18:04 EDT
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KHARTOUM (Reuters) – Sudan’s central bank governor Sabir Mohammad al-Hassanhas resigned, the bank said on Sunday, four months ahead of the secession of its oil-producing south.

The departure of the long-serving governor is likely to cause dismay in a country facing the double challenge of an economic crisis and the imminent loss of about a quarter of its territory.

“The economic situation now is precarious and the country is moving toward secession,” former state minister of finance Abda al-Mahdi told Reuters.

“The departure of Dr Sabir, who is quite well respected in economic circles, will create anxiety in an already difficult situation,” said Mahdi, who heads the economic consultancy UNICONS.

Sudan’s south is due to split away from the north on July 9 after southerners overwhelmingly voted to declare independence in a referendum in January — a vote promised in a 2005 peace deal that ended decades of north-south civil war.

Uncertainty over how the two nations will disentangle themselves, and fears of a return to conflict, have added to an economic crisis that has created foreign exchange shortages, an effective currency devaluation and rising inflation.

The central bank issued a statement saying Hassan, 65, had decided to step down because of his age and the arduous nature of the job which was having an impact on his health and family.

The statement said the governor “denies reports that disputes between the economic team led to this resignation.”

The central bank did not name a replacement.

Analysts have blamed the economic crisis on years of government over-spending and mismanagement of large parts of the economy while the government concentrated on its oil industry.

The departure of the south — the source of almost 75 percent of Sudan’s 500,000 barrels per day of crude output — will also deprive the north of much of its foreign export earnings.

One commentator, speaking on condition of anonymity, said there had been reports Hassan had grown increasingly frustrated with the country’s economic situation and the measures he was having to take to preserve the country’s dwindling foreign currency reserves.

In recent months, the central bank has imposed harsh restrictions on the import of dozens of goods and on hard cash transfers abroad, leaving many international companies struggling to repatriate profits and hurting foreign investment.

Hassan has declined to release details on the size of Sudan’s reserves, telling Reuters last year it was like asking a woman her age.

According to an IMF report, Sudan’s international reserves hit a low of $390 million in mid-2009, enough to pay for just around two weeks’ worth of imports and down from $1.58 billion in 2006.

The central bank statement said Hassan had been in the job for 16 years and had overseen the switching of the country’s dinar currency to the Sudanese pound after the 2005 Comprehensive Peace Agreement.

The U.S.-trained economist worked as an adviser to the Executive Director of the International Monetary Fund in the 1980s, added the statement.

The bank said Hassan had handed his resignation to President Omar Hassan al-Bashirin December and would step down at the end of his contract, which came on Monday.

(Reporting by Andrew Heavens; Editing by Jon Loades-Carter)

Reuters
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