Sudan finance minister rings an alarm bell over falling oil revenue
February 1, 2009 (KHARTOUM) — The Sudanese top finance official warned today that the country has an urgent need to seek other sources of revenue to offset the sharp decline in oil prices.
“The era of oil dependency is over” Al-Jaz said and revealed that the 2009 budget was calculated on the basis of $50 a barrel for the Nile blend which is currently offered at a market price of $43.
The bleak assessment by Al-Jaz comes as oil prices have plunged 70% from their peak reached in mid-July owing to a financial crisis that swept through the entire globe.
Oil exports represent 65% of revenue for Sudan and helped fuel its unprecedented economic growth despite US economic sanctions.
Some Sudanese economists speaking the London based Al-Sharq Al-Awsat accused the government of focusing on oil sector while ignoring agricultural and industrial sectors.
In December the former finance minister Abdel-Wahab Osman suggested that Sudan will need a $2 billion loan to clear the budget deficit.
The 2009 budget introduced tax hikes including duties on imported vehicles and indirect taxes on telecom services to make up for falling oil prices.
Al-Jaz called for facilitating investments in the states to create jobs and enhance production. He noted that South Sudan will be hit harder by the falling oil revenue. He also suggested that the Government of South Sudan (GoSS) is unable to efficiently collect tax and customs.
The finance minister hinted that GoSS is violating the Comprehensive Peace Agreement (CPA) by not transferring the tax and customs proceeds to the central government.
The southern Sudan legislative assembly approved a 3.6 billion Sudanese pounds as budget for the year 2009. The amount represents about half of what was spent this during the 2008 fiscal year.
The US Charge D’Affaires Alberto Fernandez met today with the Undersecretary of finance Lual Deng who called for technical help to South Sudan to “strengthen the foundations of the economy in the South”.
South Sudan is 99% dependent on oil revenue but is aiming to bring that down to 93%.
In the last few months Sudan’s state oil firm (Sudapet) has faced trouble finding acceptable bids which forced to cancel its last Nile Blend tender, for a January-loading cargo. Furthermore it skipped spot sales for February.
(ST)
Thonador
Sudan finance minister rings an alarm bell over falling oil revenue
Dear Arabs,
What are you trying to say? a businessman is a businessman either rich or poor still remain a businessman. Don’t insult southerners we are pure hearted people then you.CPA is more respected by southerners then you Arabs who are after oil in the South.We in the South we are getting less then 50% and big part is from mr. Businessman and yet they claim with their lame accusations. Where will you go if Sudan is seperated in 2011 after what so called referendum? Mr minister what ever you are doing is for the North and not for the South.If you want as a minister why not you come to the South and make comparision between the North and the South interms of development? If the era of oil dependency is over why you inform people late if you are not a pool mr. minster.
An alarm bell over falling oil revenue is not hard in the South but may be in the North where your people are benefiting in that oil. Shame on you Northern minister.