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The New Arab

Sudan's 2020 'budget of peace' to continue fuel subsidies

Khartoum hopes to gain access to foreign aid soon [AFP]

Date of publication: 30 December, 2019

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Khartoum's transitional government will spend more on healthcare and education over the next year, Finance Minister Ibrahim Elbadawi said.
Sudan on Sunday passed its 2020 budget with an overall deficit of 73 billion Sudanese pounds ($1.62 billion), Finance Minister Ibrahim Elbadawi said on Sunday.

The country's civilian cabinet and ruling sovereign council agreed the budget, the first since the ousting of longtime dictator Omar al-Bashir in April and a major milestone for Sudan's four-month-old transitional government.

Bashir's final years in power were particularly beset by economic woes, with widespread unemployment, a currency shortage and rocketing costs of living spurring initial protests against his regime in December last year.

Sudanese Prime Minister Abdalla Hamdok has repeatedly vowed to heal the economy since taking office in August this year. He is marked cuts to military spending, an end to the country's entrenched conflicts and courting foreign aid as key goals.

The 2020 budget has expected revenues of 568.2 billion Sudanese pounds ($12.63 billion), Reuters reported.

Moving towards the vision set by the transitional government, it includes increasing spending for healthcare and education. Under Bashir, military and security spending made up as much as 80 percent of the budget

While total defence spending is increased in the plan for 2020, its share of the total budget has declined.

"This is a budget of peace, it bodes for peace," Elbadawi said.

The budget also allocates an additional 9.3 billion pounds ($206 million) for areas of Sudan wracked by conflict.

A key problem facing Sudan's new government as it attempts to reform its economy is a lack of access to foreign aid. Khartoum's placement on the US list of state sponsors of terrorism impedes access to funds from international organisations such as the World Bank and International Monetary Fund.

Read more: Sudan one step - and $2 billion - away from Sponsors of Terrorism list removal

Negotiations between Khartoum and Washington over delisting Sudan have proved positive. Relations between the two countries are warming after nearly three decades of bad blood under Bashir, but Hamdok said earlier this month Sudan would need to cough up $2 billion in compensation for extremist attacks in order to be dropped from the list.

That figure could be hard to meet for Khartoum, which has not yet emerged from almost a decade of crippling economic collapse. Already weakened by US sanctions and corruption, Sudan's economy was hit hard by the succession of South Sudan in 2011. The loss of Juba cost the country three-quarters of its oil output, a major source of foreign currency.

Sudan's national debt is around $60 billion.

An earlier proposal for the budget had included a proposal to lift fuel subsidies gradually in 2020, but Informational Minister Faisal Saleh said the transitional government had decided to postpone the move until at least March, when Sudan plans to hold a donor conference. 

Abrupt cuts to bread and fuel subsidies, coupled with existing food, fuel, medicine and currency shortages and other economic woes, were a key trigger behind the protests against Bashir's regime.

Continuing commodity subsidies will make up 36 percent of the 2020 budget, Elbadawi said.

The finance minister did not say how much Sudan expected to raise in March's bid for funds, but Hamdok has previously stated the country will need up to $5 billion to see it through 2020.

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