Sudanese president reviews progress in privatization of state owned companies

January 3, 2011 (KHARTOUM) – The Sudanese president Omer Hassan Al-Bashir on Sunday met with the official in charge of the mass privatization scheme endorsed by the government later last year.

Last October, the government ordered appropriate agencies to generate the list of firms owned by it in preparation for their privatization.

Abdel-Rahman Nur Al-Deen Mustafa, chairman of the technical committee for privatizing the public sector, was quoted by state media as saying that selling state owned companies will lead to strengthening the private sector and making it stand on its feet and provide more job opportunities.

But Mustafa suggested that layoffs may result from the process. He said that his committee will review ideas relating to assisting those employees who will be impacted by the privatization by providing them alternative methods of earning a living.

The Sudanese official emphasized that all workers will receive their full rights during the process.

He praised the success of previous experiences in this area, saying that many of the sectors that have been privatized saying that regional companies have moved to invest in these opportunities.

Mustafa cited success stories in sectors of communications, cement and river transport.

Sudan began privatizing state firms in the 1990s but the economy has been somewhat restrained by U.S. economic sanctions imposed since 1997 isolating them from international money markets. Corruption and bureaucracy have also hindered growth.

The move likely reflects the growing burden imposed on the government budget by ownership of these companies particularly as the country heads towards a likely breakup of the South following the January referendum.

However, the government will have to tread carefully to prevent any social unrest resulting from the privatization process in ways similar to neighboring Egypt which has witnessed a wave of strikes by workers protesting their deteriorating conditions in companies sold to the private sector or being awarded humble severance packages.

Sudan derives some 45 percent of its gross domestic product from its modest output of 470,000 barrels per day of crude oil which comes mostly from wells in the south, with the infrastructure in the north. Under a 2005 peace deal oil from the south is divided about 50-50 between the semi-autonomous southern government and Khartoum.

Some sharing is likely to continue in a post-secession scenario as it will take years for the south to build refineries and a pipeline to a Kenyan port. But the north’s share will likely be reduced. Khartoum has moved to expand non-oil sectors to compensate.

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