Sudan passes 2016 budget with 1.6% deficit

The Sudanese Parliament has passed the budget for 2016, projecting a deficit of 1.6 percent of GDP for the coming year, up from 1.2 percent for 2015. Finance Minister Badreldin Mahmoud expects the shortage of hard currency in Sudan to decrease starting the first quarter.

The 2016 budget puts total revenues at SDG 67.5 billion ($11.14 billion) and total expenditures at 66.9 billion pounds. It projects a growth rate of 6.4 percent, up from an expected 5.3 percent for 2015.

The government said earlier this month it expected growth to increase in the coming year as lower oil prices reduce the burden of its oil import bill.

Speaking at a press conference held in the Friendship Hall in Khartoum, Mahmoud said that “new policies” in the first quarter of 2016 would curb the rising price of US dollars on the black market, though he did not provide further details.

The Finance Minister added that his Ministry will continue improving relations with the West, for the interest of the national economy and settlement of debts. Sudan’s total external debt is $46 billion, he said.

Mahmoud said spending will continue on defence and security capabilities, indicating a “leap” in the figures for the military industry, a matter which “should be looked at as an honour”. He affirmed that spending aimed at establishing peace in Sudan will continue in 2016.

Inflation has slowed to 17.9 percent in 2015 and the government targets an inflation rate of 13 percent and an unemployment rate of 18 percent in 2016, the government said this month.

Hard currency

Last week the cost of a US dollar on the parallel market rose from SDG11 to SDG11.6, the highest rate since 2011 when South Sudan seceded. The Central Bank has kept the official exchange rate at SDG6.1 to the US Dollar.

Minister Mahmoud told the press on Monday that he expects the balance of hard currency in the country to restore starting the first quarter of the next fiscal year.

Sudan’s economy was hit hard after the secession, as South Sudan took with it three quarters of the country’s oil, estimated at 5 billion barrels of proven reserves by the US Energy Information Administration. The Sudanese Pound fell as the country lost a key source of foreign exchange, used to fund purchases of food, and inflation shot up.

(Reuters, Suna News Agency)