Daily Management Review

$5 Billion In Budget Support Need By Sudan To Avoid Economic Collapse: Reuters


The economy Sudan can be saved by a financial package of up to $5 billion to prevent a collapse and to bring in economic reforms according to the finance minister of the country. in an interview to news agency Reuters, Ibrahim Elbadawi, the finance minister of the transitional government formed in August in the country said that the economy of the country is in shambles after the ouster of veteran ruler Omar al-Bashir.
Elbadawi said that the country has foreign reserves that are only enough to sustain a few weeks of imports. The Sudanese economy has been in recession since 2011 after the country had lost most of its oil wealth in South Sudan.
He said that the country immediately requires up to $2 billion in development funding in addition to a $2 billion from Arab development funds that it hopes to acquire as about 65 percent of its 44 million people live in poverty even though the country has got some support for fuel and wheat imports.
There is need to increase public salaries as well as the establishment of a social support network to cushion a crucial reform of removal of fuel and food subsidies, said Elbadawi while outlining reform plans in detail for the first time.
An uprising against Bashir, who was toppled in April by the military, had been triggered off by months of demonstrations over price hikes for fuel and bread and cash shortages. Protesters have been killed in clashes with security forces but the protests have continued to be organized in the country.
“We have started the process (of reforms),” Elbadawi said in an interview. “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.
“Some estimates say between three to four billion (US dollars), maybe even five billion,” he said when asked how much budget support was needed for 2020.
A power sharing agreement between the military of the country and the civilian government of which Elbadawi is a part is set to rule the country for three years. He said that in April, aid came from Saudi Arabia and the United Arab Emirates which amounted to $3 billion and the country has drawn about half of it to support for imports of wheat and fuel.
Elbadawi said that an agreement has been reached with the United States that would allow Sudan to engaging with international institutions for support even as it continues to be on a list of countries that are believed to be sponsors of terrorism and as a part of this effort the Sudanese government has planned a “friends of Sudan” donor meeting in December.
The designation of the country as a sponsor of terrorism has its roots in allegations made in 1993 against Bashir’s Islamist government of sponsoring terrorism. That tag makes the country technically ineligible to get debt relief and financing from the IMF and World Bank.