Oct 26, 2009

KHARTOUM (Reuters) - Sudan is concerned about an inflationary trend and is trying to move away from its dependency on oil exports after the global financial crisis hit Africa's largest country hard, the central bank governor said on Monday.

Sabir Mohammad al-Hassan told Reuters in an interview that growth may be impacted by a poor harvest this year but was expected to reach 5.5 - 6 percent in 2010, just higher than 5.5 percent in 2009.

He also said it was possible Washington could forgive Sudan's around $30 billion external debt as an incentive for implementing a north-south peace deal.

"We are concerned really about these inflationary pressures because now it is a trend when inflation continues to rise for two, three, four months consecutively," he said.

"Inflation is now...about 11 percent last month."

Sudan's economy has been wracked by multiple civil wars but a 2005 north-south peace deal brought in new foreign investment mostly from Asia and the Gulf, powering economic growth averaging 9 percent a year.

Hassan said the massive fall in oil prices, which accounts for 50 percent of government revenue, meant Khartoum had to draw on its foreign reserves and other areas to meet a shortfall in the budget and in foreign currency.

Sudan's oil minister told Reuters on Sunday that production fell short of estimates at 470,000 barrels per day in 2008/09.