Sudan attributes success of austerity measures to people’s patience
November 7, 2014 (KHARTOUM) – The Sudanese minister of finance, Badr al-din Mahmoud, said that patience and perseverance of the Sudanese people on the harsh measures included in the tripartite economic program have greatly participated to its success.
The minister said that Sudan lost oil revenues after the session of the South Sudan leading to large balance of payment and trade balance deficits and economic instability.
Sudan lost 75% of its oil reserves after the southern part of the country became an independent nation in July 2011, denying the north billions of dollars in revenues. Oil revenue constituted more than half of the Sudan’s revenue and 90% of its exports.
The minister said the tripartite programme aimed at restoring economic stability, stressing it achieved very positive results and managed to absorb the great shock caused by the session of South Sudan.
He said the harsh economic measures taken by the government prevented further negative consequence that could have occurred, pointing out that the current inflation rate is 39.2% and the value of the Sudanese pound is gaining ground against the foreign currencies which indicates improvement in the trade balance.
Since last September, the price of the US dollar dropped on the black market settling at 8.70 Sudanese pounds (SDG) after reaching a high of 9.50 (SDG).
The minister added the program addressed the budget deficit, pointing to tangible increase in production particularly the oilseeds, livestock, gold and oil, drugs and gum Arabic.
The government announced last August the implementation of the five-year program as an extension of the tripartite program, which included the partial lifting of subsidies in 2012 and 2013.
The curtailment of fuel subsidies last September almost doubled prices of gasoline and diesel, triggering some of the worst protests Sudan has seen in years.
It said that the main goals of the five-year program will be to sustain economic stability by reducing inflation, stabilising exchange rate, achieving positive growth rates, ensuring that budget deficit remains within safe limits and improving tax collection besides expanding the tax umbrella without resorting to tax increases.
REVENUE RETENTION
Meanwhile, the finance minister revealed that the central bank received over 2 billion Sudanese pounds (SDG) after his ministry applied strict measures to prevent government units from keeping revenues.
Previous budgets saw the phenomenon of government units retaining money that should otherwise be sent to the ministry of finance.
The controversial practice sparked national debate regarding the constitutionality of withholding public money by various government units, given that the ministry of finance is the only body which has the legal mandate to collect and disperse government funds.
He stressed that several measures were applied to curb the phenomenon and funnel government funds through one channel, saying the move had significant impact on regulating public finances.
“All government accounts has been transferred to the central bank and as a result, more than 2,1 billion pounds has been deposited to various ministries and government units accounts in the central bank,” he said.
The minister further underscored that stringent measures have been taken against bodies collecting revenues outside the budget.
CROP PRICES
The finance minister also said the government is committed to buy the quintals of sesame from the farmers at the price of 500 pounds (SDG).
He added they will buy the sack of sorghum at 250 pounds (SDG), saying the Agricultural Bank (AB) will collect its debts from the farmers on the basis of this price.
Mahmoud further pointed the government will buy the sack of wheat at a price of 400 pounds (SDG) in order to increase production and reduce wheat imports.
(ST)