Sudan PM announces ‘strict austerity’ in emergency economic reforms

Sudan’s Prime Minister Moataz Moussa announced to parliament on Wednesday a 15-month emergency economic-reform plan, including “further strict austerity measures,” to begin this month. (AFP)
Updated 25 October 2018
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Sudan PM announces ‘strict austerity’ in emergency economic reforms

  • The plan aims to “reduce the average inflation, stabilize the exchange rate of the pound, achieve a GDP growth of 4 percent
  • Sudan’s economy has been struggling since the south seceded in 2011

KHARTOUM: Sudan’s Prime Minister Moataz Moussa announced to parliament on Wednesday a 15-month emergency economic-reform plan, including “further strict austerity measures,” to begin this month.
Sudan’s economy has been struggling since the south seceded in 2011, taking with it three-quarters of oil output and depriving Khartoum of a crucial source of foreign currency.
The plan aims to “reduce the average inflation, stabilize the exchange rate of the pound, achieve a GDP growth of 4 percent and to fix the liquidity crises,” Moussa said.
The measures include slashing all tax exemptions except for materials needed for production, withdrawing some vehicles provided to officials, no longer paying for meals served in government meetings and banning use of imported furniture in government offices, Moussa said.
Moussa also mentioned plans to establish a commodity exchange for gold and currencies.
The economy has been starved of hard currency since South Sudan seceded in 2011, taking the lion’s share of oil, once a major export. Though gold mining has since boomed, officials acknowledge that most of the precious metal is smuggled out of the country.
At more than 60 percent, Sudan’s inflation rate is among the world’s highest. Its currency now buys fewer than half as many dollars on the black market — which has effectively replaced the formal banking system — as it did a year ago.
In September, 11 months after the United States lifted 20-year-old trade sanctions, Bashir dissolved his government, citing Sudan’s “state of distress and frustration,” and slashed a third of ministries to cut costs.
The end of the embargo has so far failed to provide a hoped- for boost to foreign investment, which economists have linked to Washington’s continued designation of Sudan as a state sponsor of terrorism.
“One of our biggest challenges that the 2019 budget is facing, is having Sudan on the list of state sponsors of terrorism,” Moussa said.


Oil rises after US Navy destroys Iranian drone

Updated 13 min 34 sec ago
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Oil rises after US Navy destroys Iranian drone

  • The International Energy Agency is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day
  • Speculators have exited options positions that could have provided exposure to higher prices in the next several years

TOKYO: Oil prices rose more than 1 percent on Friday after the US Navy destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows, again raising tensions in the Middle East.
Brent crude futures were up 82 cents, or 1.3 percent, at $62.75 by 0100 GMT. They closed down 2.7 percent on Thursday, falling for a fourth day.
West Texas Intermediate crude futures firmed 61 cents, or 1.1 percent, at 55.91. They fell 2.6 percent in the previous session.
The United States said on Thursday that a US Navy ship had “destroyed” an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone.
The move comes after Britain pledged to defend its shipping interests in the region, while US Central Command chief General Kenneth McKenzie said the United States would work “aggressively” to enable free passage after recent attacks on oil tankers in the Gulf.
Still, the longer-term outlook for oil has grown increasingly bearish.
The International Energy Agency (IEA) is reducing its 2019 oil demand forecast due to a slowing global economy amid a US-China trade spat, its executive director said on Thursday.
The IEA is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, Fatih Birol said.
“China is experiencing its slowest economic growth in the last three decades, so are some of the advanced economies ... if the global economy performs even poorer than we assume, then we may even look at our numbers once again in the next months to come,” Birol told Reuters in an interview.
Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd but had already cut the growth forecast to 1.2 million bpd in June this year.
Speculators have exited options positions that could have provided exposure to higher prices in the next several years, market participants said on Thursday.
US offshore oil and gas production has continued to return to service since Hurricane Barry passed through the Gulf of Mexico last week, triggering platform evacuations and output cuts.
Royal Dutch Shell, a top Gulf producer, said Wednesday it had resumed about 80 percent of its average daily production in the region.