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MDTF- N OC Meeting Khartoum, December 17, 2006 Sudan: New Unified National Currency PowerPoint Presentation
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MDTF- N OC Meeting Khartoum, December 17, 2006 Sudan: New Unified National Currency

MDTF- N OC Meeting Khartoum, December 17, 2006 Sudan: New Unified National Currency

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MDTF- N OC Meeting Khartoum, December 17, 2006 Sudan: New Unified National Currency

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  1. MDTF- N OC MeetingKhartoum, December 17, 2006Sudan:New Unified NationalCurrency

  2. 1- Why the introduction of the new national currency? * A new unified currency required by the CPA to represent an important symbol of national unity. * The design will carry important messages necessary for peace and unity. . * It is a joint project between southern and northern Sudan.

  3. 2 - Article 14-9 of the Wealth Sharing Agreement: • Provided for the introduction of a new currency during the interim period. • The design of the currency should reflect the diversity of the country. • Recognized the foreign currencies in southern Sudan beside the old Sudanese pound as legal tender until the introduction of the new currency.

  4. 3- Article 5 of the Implementation Modalities of the Wealth Sharing Agreement of the CPA stated that: • the source of finance is jointly by the Government of National Unity and the International Donor Community; • the responsibility of CBOS is the issuance of the new currency.

  5. 4- Currency system in the southern Sudan * Multiple currencies co-circulating - Kenyan Shilling zone – mainly south east; - Ugandan Shilling zone – mainly south west; - Ethiopian Birr zone – east; - Pre-1992 Sudanese Pound zone; - Sudanese Dinar zone; - U.S. dollar in all of the south. * Currency zones sometimes overlap.

  6. 5- Effects of the Multiple Currency System in southern Sudan: * Now in Sudan, there are six currencies recognized as legal tender.* In the South, prices in the same town and village markets sometimes expressed in more than one currency as a medium of exchange.

  7. * Very complex exchange rate system dominated by cross-rates facing normal people. * Different functions of money are performed by different currencies. * Daily economic activities and exchange rendered difficult and expensive. *Development of the south is impeded.

  8. * Economic integration of all of Sudan is also impeded. * Banknotes in circulation are highly mutilated. * Market size squeezed. * Counterfeiting of currency is a real threat. * Confusion is mounting in people’s mind.

  9. 6- Steps taken since signing the CPA: * Establishment of two Technical Committee one for the Design of the New Currency and the other for the assessment of currencies in the South.

  10. * Currency workshop in Nairobi attended by the two Parties, IMF staff, and a Norwegian government representative.* A Plan prepared by the workshop for the launching of the new currency in October 2005 delayed because of lack of funding.* Assessing of the currencies co-circulating in the Southern Sudan completed in two phases.

  11. Artistic design of the six denominations of the banknotes with World Bank funding and production of printing plates and films by Government financing. • * Design and production of dies for five coin denominations by Government financing. • * Procurement of paper and coin blanks done according to World Bank procedures.

  12. 7- The ten principles for the design of the new currency: • Reflect hope and aspirations of the people of Sudan. • (ii) Reflect the peace vision. • (iii) Reflect the Sudanese cultural background. • (iv) Reflect the unity of the country in its diversity.

  13. (v) Reflect the country’s industrial advancement. (vi) Reflect the country’s diverse national natural resources. (vii) Avoid showing religious symbols. (viii) Avoid showing ethnic symbols. (ix) Avoid showing associations to state-of-war and conflict. (x) Avoid showing any human figures.

  14. 8-Budget Estimates: * Estimation is U.S.$155 million confirmed by the IMF technical assistance mission.

  15. * Budgetary estimates cover: - Designing; - Printing and minting; - Transportation, storage, distribution etc; - Information campaign; and - Other logistic expenses.

  16. * The estimated foreign component of the budget (US$80 million) expected to be met by donors. • The estimated local component of the budget (US$75 million) expected to be met by the Sudanese government. • The procurement of paper and coin blanks through international tender cost $ 42 M.

  17. 9- The plan for the currency conversion * Starts in January 9, 2007. * Distribution will be all over the country with the bulk of the first batch to go to southern Sudan.

  18. * Conversion of foreign currencies and the old SudanesePound will be in 8 weeks then it will seize to be legal tender. * The new Sudanese Pound will co-circulate with the Dinar for a suitable period during 2007 to guarantee a smooth conversion. * To start the conversion 3 denominations of banknotes will be launched in Jan 2007.

  19. Three coin denominations will be launched in Jan 2006 mainly for the South. • A five-tiered structure of management is used for the conversion process. • Legislation steps finalized by the parliament. • Procurement of domestic requirements is in the process.

  20. 10- The importance of the project and the need for urgent funding: * Maintain the integrity of the CPA. * Reform the distorted monetary system in the country. * Restore normal economic activity in the Southern Sudan.

  21. * Enhance the economic integration and development in the Southern Sudan and the country as a whole.

  22. That is why we are keenly requesting the international donors to honor their commitments made at the time of signing the CPA as the real challenge is in the implementation of the CPA on the ground.