Sudan needs up to $5 billion in budget support to prevent collapse

Sudan has had some support for fuel and wheat imports but about 65 percent of its 44 million people live in poverty. (AFP)
Updated 08 November 2019

Sudan needs up to $5 billion in budget support to prevent collapse

  • 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
  • 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

KHARTOUM: 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.


Soleimani’s successor faces same fate if he kills Americans Iran warned

Updated 15 min 5 sec ago

Soleimani’s successor faces same fate if he kills Americans Iran warned

  • Ghaani promised to “continue in this luminous path” taken by Soleimani

DUBAI: The US special representative for Iran said the successor to Qassem Soleimani, who was killed in a US drone strike, would suffer the same fate if he followed a similar path of killing Americans, Asharq Al-Awsat newspaper reported.

Washington blamed Soleimani for masterminding attacks by Iran-aligned militias against US forces in the region. US President Donald Trump ordered the Jan. 3 drone strike in Iraq after a build up of tension over Iran’s nuclear program.

Iran responded to the killing of Soleimani, who was charged with expanding Tehran’s influence across the Middle East, by launching missile strikes on US targets in Iraq, although no US soldiers were killed.

After Soleimani’s death, Tehran swiftly appointed Esmail Ghaani as the new head of the Quds Force, an elite unit in the Revolutionary Guards that handles actions abroad. The new commander pledged to pursue Soleimani’s course.

“If (Esmail) Ghaani follows the same path of killing Americans then he will meet the same fate,” Brian Hook told the Arabic-language daily Asharq Al-Awsat.

He said in the interview in Davos that US President Donald Trump had long made it clear “that any attack on Americans or American interests would be met with a decisive response.”

“This isn’t a new threat. The president has always said that he will always respond decisively to protect American interests,” Hook said. “I think the Iranian regime understands now that they cannot attack America and get away with it.”

After his appointment, Ghaani promised to “continue in this luminous path” taken by Soleimani and said the goal was to drive US forces out of the region, which has long been Iran’s stated policy.

Tensions between Washington and Tehran have steadily increased since Trump withdrew from Iran’s nuclear deal with world powers in 2018 and imposed tough news sanctions that have hammered the Iranian economy.

This month’s military flare-up began in December when rockets fired at US bases in Iraq killed a US contractor. Washington blamed pro-Iran militia and launched air strikes that killed at least 25 fighters. After the militia surrounded the US embassy in Baghdad for two days, Trump ordered the drone strike on Soleimani.