Sudanese finance minister Ali Mahmoud Abdel-Rasool The rate of inflation in Sudan has considerably increased during the first quarter of  2012, reaching 21 percent compared to 16 percent the same time last year. Sudanese finance minister Ali Mahmoud Abdel-Rasool explained in a report submitted to the cabinet on Wednesday that the high prices of food and beverages, especially meat and dairy products, were affected by the high exchange rate.
Efforts are apparently being made with the central bank to carry out the necessary measures to limit cost-increasing factors and reduce prices to the targeted number in the budget by the end of the year.
Khartoum’s problems run deep with halted oil extraction and costly military operations.
The finance minister said the variance between the official exchange rate and  the black market went up to 55.5 percent compared to 8.8 percent last year.
He concluded the gap was due to a decline in oil resources and the movement of speculative activity.
Nonetheless, Abdel-Rasool projected a 2.2 percent growth rate in 2012, something which contrasted sharply with the forecast of the International Monetary Fund\'s projection last month of -7.3 percent.
The IMF also expected consumer prices in Sudan to increase by 23.2 percent in 2012 and 26.0 percent in 2013, which is the highest in the Middle East region.
However, Omer Mohamed Saleh, spokesman of the council of ministers,  said the biggest problems in the financial sector are economic sanctions, and the non-collection of oil transit fees from South Sudan, which are estimated at 6.9 billion Sudanese pounds ($2.9 billion US).
The Khartoum government interestingly announced they were pumping oil again, from what is believed by most analysts as a damaged infrastructure in the oil fields.
The ongoing military conflict on the oil-rich border with the Republic of South Sudan is also draining cash from Khartoum’s budget.
When South Sudan seceded last year, they took with them 75 percent of Sudan’s oil revenue.
The only way to move the oil is through a pipeline north, which was taxed heavily by Khartoum.
When the South Sudan government felt the oil was being siphoned and other problems were taking place in the transit, they shut off oil extraction in the region altogether.
The UN and the African Union are involved in mediation to resolve the conflict.