CAIRO: Inflation in the Sudan rose to 21 percent the first quarter of 2012 – and this, compared to 16 percent for the same time period last year, the Sudanese Finance and National Economy Minister Ali Mahmood Abdel-Rasool said. Abdel-Rasool said in a report submitted during the council of ministers meeting headed by the Sudan's president, Omar Bashir that the detrimental inflation rate was because of rising food prices in meats and dairy products Omer Mohamed Saleh, spokesman of the council of ministers, however, 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 pounds. This, according to a report in The Sudan Tribune. 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 the 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. Khartoum's problems run deeper that halted oil extraction and costly military operations. The finance minister said the variance between the official exchange rate and black market went up to 55.5 percent compared to 8.8 percent last year. 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 (IMF) last month projection 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. In other incongruous statements, the Khartoum government announced they were pumping oil again, from what is believed by most analysts as a damaged infrastructure in the oil fields.