Salary arrears adds to Sudan’s troubled finances
February 8, 2023 (KHARTOUM) – Sudan’s government employees have reported a delay in receiving their January salaries amid an acute crisis in revenues.
Last week, the joint meeting of the Sovereignty Council and the acting cabinet approved the 2023 budget with projected revenues of 7.363 trillion pounds against 8.196 trillion pounds in expenditures that represent a deficit of 1.4% of the GDP.
Employees at the Ministry of Finance told Sudan Tribune that a “revenue deficit” during the past month resulted in the salary arrears, adding that state transfers fed by the central government were also delayed.
The deputy chair of the Sovereignty Council Muhammad Hamdan Dagalo (Hemedti) confirmed during an event in Khartoum state the salary crisis.
Haitham Mohamed Fathi, a Sudanese economist, told Sudan Tribune that the new fiscal year requires finding a way to increase revenues, cut spending to reduce the budget deficit and revitalise the economy by coming up with hard currency needed to import goods and raw materials and eliminating Forex black market.
Fathi slammed the proposed government budget as “romantic” which puts forward no solutions that would positively impact the Sudanese economy and expressed scepticism in achieving the government’s target economic growth rate during the new fiscal year 2023/2024 in light of the global economic challenges that impacted the Sudanese economy.
He stressed that the increase in Sudanese budget revenues will be through raising tax revenues to 80% of the total revenues approximately. In addition to raising the prices of some services, including identity papers and other services such as electricity, water, consumer goods and others annually.
The economist further said that the Ministry of Finance should have focused on overhauling its tax collection strategy to include the “informal economy” among other measures.
An official in the finance ministry – who requested anonymity- revealed that the Minister of Finance Gibril Ibrahim objected during the previous budget discussions to two ministries that he claimed were withholding funds they receive instead of passing them to the treasury.
Ibrahim identified the two ministries by name, but the source did not disclose them. He only said that one is a service ministry, and the other belongs to the judicial side.
Another employee in the ministry told {Sudan Tribune} that the funds transfers to the regional states have already started with disbursements scheduled for Wednesday.
He attributed the salary delay to the government’s failure in approving the 2023 budget.
Sudan’s foreign trade deficit during the period from January to September 2022 amounted to more than $3.5 billion, according to statistics issued by the Central Bank of Sudan (CBoS).
Farouck Kambareesi, the former CBoS deputy governor said that these figures present a gloomy outlook.
“The economic prospects appear pessimistic with the (October 25, 2021 military) coup. The end of 2022 will be accompanied by many challenges, not just in the performance of the external sector. The situation will become direr in 2023 because all the gains of economic reform are still at risk of regression. The most serious issue is the cost of living crisis, the stagnation of the business sector, and international isolation,” Kambareesi wrote in a Facebook post.
(ST)