Sudan says drop in world prices of oil, wheat offers reprieve to budget
December 18, 2014 (KHARTOUM) – The Sudanese government said on Thursday that the global decline in oil and wheat prices allowed Khartoum to reduce subsidies on fuel and bread and helped curtail the import tab which currently stands at $650 million.
The price of oil touched its lowest level since 2009 when the world economy was going through a financial meltdown. Analysts attributed this collapse to high oil production from the United States which has overwhelmed demand at a time of lacklustre global economic growth.
According to finance minister Badr al-Din Mahmoud, his ministry has been able to boost spending on social welfare which he revealed that it has reached 410,000 families at an average of 150,000 Sudanese pounds per family in addition to the expansion of health insurance to cover an additional 200,000 families.
He noted that that students and handicapped continue to be covered as well as the provision of free emergency treatment in hospitals and free treatment for children under the age of five.
On increasing wages, the finance minister said that the president has formed a committee to look into the matter and then report on it.
He stressed that they were able to fulfill all financial obligations and improve pensions.
Mahmoud announced that the 2015 budget will not contain any new taxes and that instead they will benefit from the recommendations of the tax and customs reform committee especially with regard to broadening the tax umbrella and improving collection.
The Sudanese official went on to say that they satisfied all dues to peace funds established in accordance with agreements related to conflicts in Darfur and East Sudan.
He noted that the rainfall this year has strengthened export capacity for oilseeds and other crops which contributes to lowering inflation by 20%.
He projected a surplus in revenues for 2015 which will help cover several spending items such as wages and social spending.
The cabinet approved in its weekly meeting today chaired by president Omer Hassan al-Bashir the 2015 budget as presented by the minister of finance.
The International Monetary Fund (IMF) said this month that Sudan has achieved satisfactory progress in achieving goals set by the Staff-Monitored Program (SMP).
The IMF further said that it expects non-oil growth to hit 2.9% this year as a result of strong gold extraction and a rebound in agriculture due to favorable weather.
“Inflation is expected to drop to 29 per cent by year-end from 47 per cent in July as the one-off effects of the September 2013 fuel price increases dissipate, monetary policy is tightened, and food prices decline owing to the expected good harvest. The fiscal deficit is expected to narrow to about 1.0 per cent of GDP,” it added.
For next year, the IMF said it expects a solid growth driven by gold, agriculture, and oil.
“The outlook for 2015 has improved but is subject to domestic and regional risks. Real GDP growth is projected at 3.4 per cent supported by a good harvest, robust gold production, and the recovery of oil production,” it said.
Sudan’s GDP is estimated to have grown at 2.7% in 2013 and projected to stand at 3.0% in 2014.
(ST)