Sudan PM announces 'strict austerity' in emergency economic reforms

KHARTOUM (Reuters) - Sudan’s Prime Minister Moataz Moussa announced to parliament on Wednesday a 15-month emergency economic-reform plan, including “further strict austerity measures”, to begin this month.

Sudan’s economy has been struggling since the south seceded in 2011, taking with it three-quarters of oil output and depriving Khartoum of a crucial source of foreign currency.

The plan aims to “reduce the average inflation, stabilize the exchange rate of the pound, achieve a GDP growth of 4 percent and to fix the liquidity crises,” Moussa said.

The measures include slashing all tax exemptions except for materials needed for production, withdrawing some vehicles provided to officials, no longer paying for meals served in government meetings and banning use of imported furniture in government offices, Moussa said.

Moussa also mentioned plans to establish a commodity exchange for gold and currencies.

The economy has been starved of hard currency since South Sudan seceded in 2011, taking the lion’s share of oil, once a major export. Though gold mining has since boomed, officials acknowledge that most of the precious metal is smuggled out of the country.

At more than 60 percent, Sudan’s inflation rate is among the world’s highest. Its currency now buys fewer than half as many dollars on the black market — which has effectively replaced the formal banking system — as it did a year ago.

In September, 11 months after the United States lifted 20-year-old trade sanctions, Bashir dissolved his government, citing Sudan’s “state of distress and frustration”, and slashed a third of ministries to cut costs.

The end of the embargo has so far failed to provide a hoped- for boost to foreign investment, which economists have linked to Washington’s continued designation of Sudan as a state sponsor of terrorism.

“One of our biggest challenges that the 2019 budget is facing, is having Sudan on the list of state sponsors of terrorism,” Moussa said.