Oil price drop may force Sudan to tighten belts: Officials
October 21, 2008 (KHARTOUM) – Sudan is considering new fiscal measures in lights of the continued drop in oil prices, a newspaper reported today.
The independent Al-Sudani newspaper quoting sources at the finance ministry said that Khartoum established a committee to evaluate the economic situation and come up with recommendations to prevent a possible crisis.
The committee is contemplating an “exceptional budget” for 2009 that will likely cut down on expenditure and focuses on new revenue opportunities besides petroleum industry.
Furthermore the government will scrutinize adherence to the budget for the remaining months of 2008.
The Sudanese finance and national economy minister Awad Al-Jaz has reportedly met with heads of government owned companies to discuss ways of boosting revenue and make up for shortfall in oil prices.
Oil is the main source of revenue for Sudan and helped fuel its unprecedented economic growth despite US economic sanctions.
Many Sudanese economists have warned that government spending is getting out of control leading to a rise in inflation rates.
However the global financial crisis has led investors to believe that oil demand will be severely curtailed in developed nations and possible China and India. Crude oil is down 52 percent from its all-time peak of $147.27 reached July 11.
(ST)