A Sudanese vendor waits for customers outside a grocery store in
Khartoum. Sudan wants to produce bread based on sorghum, a local cereal,
to import less wheat. PHOTO | ASHRAF SHAZLY | AFP
Sudan needs up to $5 billion in budget support to avert economic
collapse and launch reforms after the ouster of veteran ruler Omar
al-Bashir, its finance minister told Reuters.
The
country, in crisis since losing most of its oil wealth with South
Sudan’s secession in 2011, has only enough foreign currency reserves to
fund imports for a few weeks, said Ibrahim Elbadawi, part of a
transitional government formed in August.
Sudan has had
some support for fuel and wheat imports but about 65 percent of its 44
million people live in poverty and it needs up to $2 billion in
development funding along with a hoped-for $2 billion from Arab
development funds, he said.
Outlining reform plans in
detail for the first time, Elbadawi said public salaries would need to
be increased and a social support network established to prepare for the
painful removal of fuel and food subsidies.
Months of
demonstrations over price hikes for fuel and bread and cash shortages
triggered the uprising against Bashir, who was toppled in April by the
military. Protests have continued since, with people killed in clashes
with security forces.
“We have started the process (of reforms),” Elbadawi said in an interview on Thursday.
“The people of Sudan deserve to be seen in a radically different
prism than the international community used to see Sudan, as a country
ruled by a pariah state.”
“Now we have a revolution,”
he said. Asked how much budget support was needed for 2020 he said:
“Some estimates say between three to four billion (US dollars), maybe
even five billion.”
The civilian government Elbadawi is part of has taken over for three years under a power-sharing deal with the military.
It
has drawn slightly more than half of $3 billion in support for imports
of wheat and fuel offered by Saudi Arabia and United Arab Emirates in
April, he said.
A “friends of Sudan” donor meeting is
planned for December and the government had agreed with the United
States it could start engaging with international institutions while
still on a list of countries deemed sponsors of terrorism, Elbadawi
said.
The designation, which dates from allegations in
1993 that Bashir’s Islamist government supported terrorism, makes it
technically ineligible for debt relief and financing from the IMF and
World Bank. Congress needs to approve a removal.
Currency
The
first experts from international institutions had arrived in Khartoum
to help with reforms and a delegation of the International Monetary Fund
(IMF) would come this month for Chapter IV discussions, Elbadawi said.
There was no immediate comment from the IMF, World Bank or US State
Department.
Part of a roadmap agreed with the IMF and
World Bank was that Sudan did not have to pay back $3 billion in arrears
from international institutions.
“We don’t need to pay
anything. What we need to...deliver really is policy,” he said. Sudan
is one of the most indebted countries, owing $60 billion, which needs to
be settled separately.Sudan would start to increase its tax base and
overhaul the civil sector, Elbadawi said.
Salaries—eroded by double digit inflation rates—could be raised as much as 100 percent by April.
In
the second half of next year a social support network would be set up
to allow the lifting of subsidies by June or later. Some donor funding
would be used to collect data to allow cash transfers for the needy.
Sudan
also wanted to produce bread based on sorghum, a local cereal, to
import less wheat. He said he hoped a spread between official and black
market would be ended by June. But this week the local pound dropped to
80 for a dollar on the black market versus the official rate at 45.
He
said the 2020 budget would have sustainable development targets for
education, health care and social spending, suggesting Sudan might move
away from the dominant military spending choking development.
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