SUDAN, KHARTOUM (OBSERVATORY NEWS) — Sudan needs up to $ 5 billion in budget support to avert an economic meltdown and will launch reforms after ousting Omar al-Bashir, Finance Minister Ibrahim al-Badawi told Reuters.
The finance minister of the interim government, formed in August, said the country had enough foreign exchange reserves to finance imports for several weeks.
Sudan has been in crisis since losing most of its oil wealth with southern Sudan seceding in 2011.
Badawi said Sudan had received some subsidies for fuel and wheat imports, but about 65 percent of its 44 million people were poor and needed development funding of up to $ 2 billion, with $ 2 billion hoped to come from Arab development funds.
In a detailed review of reform plans for the first time, al-Badawi said there would be a need to increase public sector salaries and a social support network was set up to tackle a difficult elimination of fuel and food subsidies.
Months of protests against fuel price increases, bread and a lack of liquidity sparked an uprising against Bashir, who was ousted by the military in April. Protests have continued since then, with deaths in clashes with security forces.
“We started the process (of reforms) … the Sudanese people deserve to be seen from a completely different perspective compared to what the international community used to use to look at Sudan as a pariah state,” Badawi said in an interview on Thursday.
“Now we have a revolution,” he said. Asked how much budget support would be needed for 2020, he said: “Some estimates say between three and four billion dollars, maybe even five billion dollars.”
The civilian government to which Badawi belongs has been in power for more than three years under a power-sharing agreement with the army. Badawi said she had received just over half of the $ 3 billion in fuel and wheat imports provided by Saudi Arabia and the United Arab Emirates in April.
Badawi said a meeting of the donor group “Friends of Sudan” was due to take place in December and the government had agreed with the United States that it might start reaching out to international institutions while remaining on a list of countries described as sponsors of terrorism.
That would make Sudan technically ineligible for debt relief or IMF and World Bank funding. Deleting Sudan’s name from the list would require congressional approval.
– the currency –
Badawi said the first experts from international institutions had arrived in Khartoum to help with reforms and that an IMF delegation would arrive this month for Article IV consultations. There was no immediate comment from the IMF, the World Bank or the US State Department.
Part of a roadmap agreed with the IMF and the World Bank is that Sudan will not have to pay $ 3 billion in arrears to international institutions.
“We don’t need to pay anything. What we really need is policy implementation. ” Sudan is one of the largest debt-ridden countries, with $ 60 billion in debt that needs to be settled separately.
Badawi said Sudan would embark on increasing the tax base and reforming the public sector. Salaries, eroded by double-digit inflation, could be increased by 100 percent by April.
In the second half of next year, a social support network will be established to allow the subsidy to be eliminated by June or later. Some donor funding will be used to collect data to make cash transfers available to those in need.
Sudan also wants to produce bread from locally produced maize to import less wheat. Badawi said he hoped the exchange rate between the official market and the black market would be over by June. But this week the Sudanese pound fell to 80 dollars on the black market compared with the official exchange rate of 45 pounds to the dollar.
The minister said the 2020 budget would include sustainable development goals for education, healthcare and social spending, suggesting Sudan might move away from the dominance of military spending, stifling development.
This article is written and prepared by our foreign editors writing for OBSERVATORY NEWS from different countries around the world – material edited and published by OBSERVATORY staff in our newsroom.
OBSERVATORY — Breaking news source, real-time coverage of the world’s events, life, politics, money, business, finance, economy, markets, war and conflict zones.
Contact us: [email protected]
We are OBSERVATORY — the only funding and support we get from people – we are categorically not funded by any political party, any government somewhere or from any grouping that supports certain interests – the only support that makes OBSERVATORY possible came from you.