Government Tables Modified Budget before the Parliament

Omdurman – Lack of breakthroughs in negotiations between Sudan and South Sudan, war in South Kordofan and Blue Nile States, continued economic blockade and subsidy of petroleum products are the key challenges encountered by the country’s economy, Sudan’s Minister of Finance and National Economy, Ali Mahmoud Abdul Rasool, said in his speech before the National Assembly yesterday.

He said over the past period the Ministry worked out financial and monetary reforms including various necessary measures and amendments to cope with political, economic and security situation in the country, adding that the package was submitted to executive and political leadership of the country for consideration.

The Minister who was addressing the Parliament on an amended budget for 2012, said the Ministry decided to rationalize public spending by stopping hosting of regional and international conferences and organization of official celebrations until the end of this year, reduce allocation of fuel to government departments by 15%, rationalize of consumption, freeze spending on implementation of structures and enhancement of services and revoke already approved structures.

On monetary policies, the Minister said the budget aims at reducing the difference between the official and parallel rates of exchange, adding that the new budget was prepared based on a rate of exchange of SDG 4.4 a dollar. He said the budget also aims at procurement of petroleum products from abroad at deferred payment and to obtain loans and grants to provide foreign exchange. He said external obligations would be rescheduled and supply of foreign exchange to exchange bureaus would be halted and they would be given the freedom to determine the rate of exchange for invisible payments that which include traveling, medical treatment, study and transfers of foreign labor.

In the field of general financial policies, the Minister stressed the need to enact stringent laws and to find sources of new revenues by increasing duties on some commodities including non-essential commodities. He said development tax on imports would be increased from 10 to 13% except capital commodities, production inputs and some essential commodities. The Minister added that VAT would be increased from 15 to 17%, tax on business profit would be increased from 15 to 30%, privatization of public companies would be expedited and tax evasion and smuggling especially across the border with South Sudan would be combated.

In the field of expenditure, the Minister said government spending would be cut, subsidy on fuel would be gradually lifted and public spending would be rationalized.

The Minister of Finance elaborated that external efforts would be made to attract foreign investments, funding and grants from various financial institutions. 

He said the Central Bank of Sudan would continue to buy gold at prevailing prices and that foreign exchange would be used to redress the gap of essential commodities such as fuel and wheat, with a focus on attracting expatriates’ savings and export revenues.