US State Department lauds Sudan’s ‘great progress’ in financial transparency

The US state department announced that Sudan’s transitional government has made great progress in financial transparency, after publishing the spending budget of all ministries within three months of enactment, including the office of Prime Minister Abdallah Hamdok.

“It made significant progress because budget documents were prepared according to international standards, made public, and included information on debt obligations for the first time,” according to the statement published on Friday. In addition, “although budget estimates deviated from budget execution, the government made significant progress by producing and publicly issuing revised budget estimates.”

Despite significant progress, “budget documents were not substantially complete because they did not include off-budget revenue from military-owned enterprises and military expenditures continue to be under-reported and opaque,” said the report.

The report emphasised that financial transparency in Sudan could be improved by eliminating any off-budget accounts or subjecting them to appropriate auditing and supervision, and by imposing greater civilian oversight over the country’s military and intelligence budgets.

“True economic transparency and reform, as well as true civilian governance, will remain impossible so long as these exclusions continue." – Prof Eric Reeves

Respected Sudan analyst Prof Eric Reeves, who is a former Senior Fellow at Harvard University’s François-Xavier Bagnoud Center for Health and Human Rights, tweeted that this “particularly important dispatch makes clear how burdened Sudan’s economy remains because of ‘off book’ activities by the military (and Rapid Support Forces militia).”

The report also highlights how resistant the Chairman of the Transitional Sovereignty Council and Commander of the Sudan Armed Forces, Lt Gen Abdelfattah El Burhan, and Deputy chairman of the Sovereignty Council, Lt Gen Mohamed Hamdan ‘Hemeti’ remain to revealing their sources of wealth and power, according to Reeves.

“True economic transparency and reform, as well as true civilian governance, will remain impossible so long as these exclusions continue. This is one of the most dangerous and consequential legacies of the Al Bashir regime,” explained Reeves.

On March 26, Suliman Baldo of The Sentry published a report which argued that re-establishing civilian control over the finances of the military and security services remains an existential challenge. “Despite the rapidly changing landscape, the existence of hundreds of state-owned enterprises (SOE) that continue to keep their revenues off the books while benefiting from the lion’s share of public expenditures, a distortion inherited from the kleptocratic regime of deposed President Omar Al Bashir, poses a real threat to the economic recovery the Sudanese people have long waited for.”

The Sudan Democratic Transition, Accountability, and Fiscal Transparency Act of 2020 was enacted in December to support a civilian-led democratic transition, promote accountability for human rights abuses, and encourage fiscal transparency in Sudan.

Monitoring delays

The report noted that Sudan’s monitoring body, which meets international standards of independence, conducted audits that covered the entire annual implementation budget, but did not publish them in a reasonable time.

The report added that the Sudanese government set standards and procedures by which the government legally granted contracts or licenses to extract natural resources, noting that "it appears that these procedures and standards were not followed in practice. Basic information on incentives to extract natural resources was not publicly available."

The report recommended ensuring that the oversight body reviews the government’s executed budget within a reasonable time, and publishes its reports, in addition to adhering to the process of awarding contracts extracting natural resources and licenses provided by law and making information on incentives to extract natural resources available to the public.