The Sudanese Cabinet Approves the 2021 Budget

  • Khartoum, Sudan
  • 8 January 2021
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The Sudanese cabinet approved the 2021 budget, which will keep subsidies on wheat, electricity, cooking gas and medicine. However, despite the government’s approval of the budget, the final approval of the budget must come from a joint meeting between the Council of Ministers and the Transitional Sovereign Council.

Sudan is going through a severe economic crisis, with inflation reaching 254 percent in November. The Sudanese pound fell sharply last year, falling to around 263 per dollar on the black market. While the official rate used to calculate the budget is 55 Sudanese pounds to a dollar.

According to the Council of Ministers, the budget includes a target of 95% inflation by the end of 2021. While the new budget targets GDP growth of 1.7 percent, with expectations of a deficit equivalent to 1.4 percent of GDP.

In 2020, Sudan canceled exorbitant subsidies for gasoline and diesel imports, which led to sharp rises in the prices of the two basic commodities. The program aims to support families, which was put under the supervision of the World Bank and with international funding, transfers directly monthly cash amounts to up to 80 percent of the population to face the repercussions of the subsidy removal.

The cabinet indicated that 24 percent of the budget, equivalent to 260 billion pounds (4.73 billion dollars based on the official exchange rate), will be allocated to this program and other support and social security programs.

According to the budget, the tax base will increase by 60 percent, while revenues from gold, one of Sudan's main natural resources, will rise strongly to 100 billion pounds, from 18 billion in 2020.

The transitional government has given priority to the health and education sectors in the budget. The health care sector is set to receive 9 percent of the budget, or about 100 billion pounds. While education will receive 12.5 percent of it, or 137 billion pounds, which is the first time that the percentage allocated to education in the budget exceeds the allocations for defense, in which the defense item is set to receive 12.4 percent of the spending.

Source (CNBC Arabic website, Edited)

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