Sudan seeks U.S. help on subsidy payments, dollar transfers: finance minister

By Khalid Abdelaziz and Aidan Lewis

KHARTOUM (Reuters) - Sudan is asking the United States for help in arranging a smart card system as it prepares to announce reforms to its subsidy system next month, including a possible move towards targeted cash transfers, the finance minister said on Monday.

Sudan aims to decide on subsidy reforms after an economic meeting next month between the government and a civilian coalition that emerged from last year's popular uprising.

Generous fuel and bread subsidies have strained the public purse while creating supply and distribution problems and encouraging black market trade, contributing to an economic crisis.

The transitional government formed after the overthrow of Omar al-Bashir is attempting to salvage and reform the economy but faces pressure from citizens impatient to see living conditions improve.

It is also trying to overcome commercial restrictions related to Sudan's inclusion on a U.S. list of countries considered state sponsors of terrorism. U.S. officials have indicated that Sudan could be removed from the list but it is unclear when.

Finance Minister Ibrahim al-Badawi said sanctions had hampered efforts to prepare smart cards for a reformed subsidy system, and that international banks had been reluctant to resume transfers to Sudan because of the terrorism listing.

However, Sudan was talking to the U.S. about Citibank entering the country and about enabling the use of smart cards and ID cards to manage cash transfers, Badawi said at a press conference in Khartoum.

The economic crisis has become more pressing. There are again shortages of bread and fuel with motorists queuing for hours in Khartoum to buy petrol in recent days.

On Monday, Sudan's top military authorities also met to discuss the economic crisis.

The March discussions with the Forces for Freedom and Change (FFC) coalition would also address liberalising the exchange rate. The Sudanese pound slipped to nearly 100 to the dollar on the parallel market in recent weeks, against an official rate of 50.4 pounds to the dollar.

In April, Sudan would report to the Paris Club of wealthy creditor nations over possible mechanisms for forgiving foreign debt that stands at $60 billion, he said.

Another challenge for the transitional government is the extensive economic interests and privileges held by Sudan's military apparatus. Military-controlled companies would make a contribution of $2 billion to support this year's budget while the government seeks a way to bring them under the control of the finance ministry, Badawi said.

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