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'Economic conditions to worsen in Sudan'

January 28 - 2022 KHARTOUM
Sudanese Pound inflation (file photo)
Sudanese Pound inflation (file photo)

Dr Hasan Bashir, Professor of Economics at El Nilein University in Khartoum, told Radio Dabanga that he expects the economic conditions in the country to deteriorate if the current political impasse is not overcome and political stability is not achieved in Sudan.

In an interview with Radio Dabanga, Bashir also explained that the 2022 budget does not constitute a normal ‘general National budget’ because the customary procedures were not followed, and the budget was prepared in the absence of the Council of Ministers.

Bashir called for marking this budget as ‘a temporary budget’ to guide the current economic and political affairs of the country until a solution is found to the political chaos after the October 25 military coup and a government is formed.

The economist further explained that the budgeted revenue estimates are unrealistic, in part because the budget relies on local resources and on raising tax revenue to a much higher level. Tax revenues declined significantly at the end of last year and are not likely to increase any time soon.

Capitalising on the country’s resources will also be difficult as a result of the recurring mass protests and the continuous closures of infrastructure and industries. This has disrupted the already declining production chain, the commerce sector, and exports and imports.

The frequent closure of the country's seaports caused a sharp decline in the movement of exports and imports.

Dr Hasan Bashir, Professor of Economics at El Nilein University in Khartoum (RD file photo)

 

Bashir pointed out that the budget was prepared at a time when Sudan faced the suspension of a number of resources, such as grants, subsidies, and development loans, that would feed the general budget, stabilise the exchange rate, and control inflation rates.

The economist said that the budget will not withstand the practical reality that Sudan finds itself in today and that he expects a significant rise in inflation and foreign exchange rates.

'The 2022 Budget will not withstand the practical reality of Sudan'

The foreign currency exchange rate has indeed increased, after declining for days. Foreign currency exchange dealers told Radio Dabanga on Wednesday that the selling price of US Dollars amounted to 1 US Dollar for 498 Sudanese Pounds, compared to 480 Sudanese Pounds on Monday. They attributed the rise in foreign exchange rates to a lack of supply and an increase in demand, despite the decisions of the Ministry of Finance to regulate the export of gold.

Bashir further explained that the budget relied on an increase in service fees and pointed at the recent significant rise in electricity tariffs, which causes an increase in production costs and adds a significant burden to the lives of the Sudanese people through increasing prices. Those price increases in turn significantly affect inflation rates.

Dr Bashir told Radio Dabanga in September that he expected the economy to improve in 2022, on the condition that the political and security situation would remain stable, but that statement was made before the military coup d'état plunged the country into chaos and caused a (temporary) end to many international aid programmes.


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