Sudan finance minister calls on parliament to adopt ‘pray for rain’ scheme

June 5, 2013 (KHARTOUM) – The Sudanese minister of finance and national economy Ali Mahmoud Abdel-Rasool has implored upon lawmakers to adopt the “Prayer for rain” scheme in order to ensure the success of the agricultural season.

Abdel-Rasool warned that a good agricultural season is crucial component of filling the budget hole which resulted from the secession of the oill-rich south in July 2011.

In Islam, ‘Salatul Istisqa’ (Prayer for rain) is taken recourse to when seeking rain from Allah (God) during times of drought.

The MPs, who deliberated on the ministry of finance’s quarterly performance report yesterday criticized the continuous fluctuation in exchange rate and skyrocketing inflation rate while calling for establishing agricultural projects in the Darfur and Kordofan states to increase agricultural production.

They further stressed that, according to the report, tax revenues were the main source of revenues which reflects government’s neglect of production activities.

MP Babikir Mohamed Toum, said that exports have decreased while imports have increased which contradicts the goals of the governments’ tripartite economic program implemented by Khartoum in the wake of South Sudan’s independence.

Toum also spoke of a decline in gold revenues and called upon the finance ministry to conduct a study on the reasons behind that stressing that the deterioration in exchange rate is caused by decrease in gold exports.

Gold has become Sudan’s biggest export, partially replacing oil revenues that made up more than 50% of state income until the south’s secession.

This week the Sudanese government projected that it will produce 50 tonnes of gold this year.

MP Mohamed Sideeg Duroos highlighted that gold exports were only 9 tons in contrast to government’s plans of exporting 25 tonnes. He claimed that the gap is not caused by a shortage in supply of gold but the policies of the central bank.

The minister of finance, for his part, stressed that the discrepancy between the gold purchase price and the exchange rate was the reason for halting central bank’s purchase of gold.

“The central bank hasn’t sold all its gold, it still have gold reserves which could be exported at any point in time” he said.

MP Abdalla Masar has accused the central bank, ministry of finance, and security apparatus of involvement in gold sale violations, calling upon the minister to meet with the gold trade chamber to discuss the issue.

Abdel-Rasool demanded that the parliament authorize the gradual lifting of commodities’ subsidies in order to curb smuggling and reduce inflation rates revealing that large amounts of gasoline have been smuggled to Eritrea.

The minister acknowledged the government’s inability to stop commodities smuggling, saying “we will not be able to stop smuggling even at gunpoint”.

MP Al-Zubeir Mohamed Al-Hassan, backed the minister’s calls and pointed out that the government spent 20% of its budget in the first quarter on subsidies.

Al-Zubeir pointed out that the real challenge is to lower inflation rate, stressing that budget deficit has decreased by half in the first quarter compared to last year.

The lawmakers underscored the need to put pressure on the government to cut public spending and reform its slouch institutions.

Last year, the government launched a package of tough austerity measures, including scaling back fuel subsidies to close a fiscal gap, sparking short-lived protests.

Khartoum also moved to effectively devalue the currency which came under enormous pressures as a result of a big shortage in foreign currencies.

Statistics indicate that 2 million Sudanese families live in poverty including 300,000 who do not have access to food and drink.

The World Economic Outlook (WEO) released last April by the International Monetary Fund (IMF) showed Sudan’s economy shrinking by -4.4% in 2012.

In 2013, Sudan is expected to achieve a 1.2% growth which is higher than the -0.6% projected by the IMF last year. Next year’s GDP is also forecasted to stand at 2.6% which is slightly better than the 2.1% predicted in the IMF last assessment of Sudan’s economy.

(ST)