Dollar dignity and gold production .. Bumps transit test the first budget of the government of the revolution in Sudan

Ahmed Fadl-Khartoum

Merchants of the Central Vegetable and Fruit Market in Khartoum are waiting for the sea in January each year with some anticipation. Since South Sudan has gone about 75% of oil production, profit and loss accounts are recalculated based on troubled state budgets.

With inflation soaring to more than 57 percent last month, traders are preparing to recalculate based on a new cost of vegetable production and transport if the transitional government scraps gasoline subsidies in the 2020 budget.

According to leaks, the new government intends in its first financial budget to raise support for gasoline and keep it on gasoline, wheat, cooking gas and medicine. Traders say vegetables are often transported on gasoline-powered pickups.

Since South Sudan seceded in July 2011, Sudanese have tried early in the year to lift government subsidies on goods and services, the most severe of which were in September 2013, at which time around 200 people were killed in protests over the cost.

The rebels' proposals
The Economic Committee for the Forces for Freedom and Change is currently in discussions with the government on the new budget guidelines.

Adel Khalafallah, vice chairman of the committee, said in an interview with Al Jazeera Net that the discussions focus on creating non-traditional solutions based on local resources, as the revolution invented its methods and methods.

Khalafallah is like relying on donors to mirage because the 2005 donor conference in Oslo after the CPA committed Sudan to $ 4.5 billion, while what was paid was only $ 800 million.

Among the Commission's solutions, Khalafallah points to the provision of procedural aspects by the Ministry of Finance and the Central Bank of Sudan to activate the Dignity Dollar, an initiative adopted by expatriates and immigrants.

He confirms that there are nine million Sudanese abroad, including seven million expatriates, remittances ranging from 7 to 13 billion dollars through the parallel market because of the difference between the black market and the official rate of the Bank of Sudan.

Such remittances are able to provide the required macroeconomic corrections announced by Finance Minister Ibrahim al-Badawi and Prime Minister Abdullah Hamdouk, which range between $ 5 and $ 7 billion.

Gold Exchange
The Economic Commission also puts up the Gold Exchange, making it clear that Sudan is the third producer of precious metal in Africa, but most of the production is smuggled.

Khalafallah said the committee had alerted the government to Bank of Sudan data that the annual production of gold is 147 tons, but about 104 tons are smuggled, as well as the real production is twice as advertised as evidence that the Sudanese gold to the Dubai Stock Exchange is 267 tons.

It is proposed that the government limit the quantity of the product to 150 tons, of which 100 tons are exported, and the rest is placed annually as a reserve in the Bank of Sudan to correct the situation of the Sudanese pound.

Khalaf Allah warns that reliance on gold as a single source of hard currency foreshadows the era of gold, similar to the periods of dependence on long staple cotton and oil earlier.

Trapping corruption
The Committee requested - according to Khalafallah - to enhance the competitiveness of agricultural production, which needs between $ 1.8 and 2.1 billion annually to finance the cultivation of 50 million acres, so that the area is reduced to between 15 and 20 million acres with technical packages to ensure greater production of crops determined by the state and at a lower cost .

He stresses that it is necessary to control government spending and achieve the unity of the Treasury and the economic decision and the encirclement of corruption and spare and the abolition of customs exemptions that amounted to - recognized by the "defunct regime" - 40% of the budget revenues.

Regarding guarantees that the government has the will to enforce the guidelines discussed by the Economic Committee of the Coalition of Forces for Freedom and Change, the vice president of the Economic Committee says they rely on pledges made by the finance minister and the prime minister to consult the people on the budget.

External options
Stock market advisor Taha Hussein says it is difficult in the first budget of the new government compared to the 2019 budget, because it was without standards and relied on cash support in the range of $ 1 billion.

According to Hussein, Saudi Arabia and the UAE have provided $ 500 million, Kuwait $ 200 million, and the Arab Monetary Fund $ 300 million, along with commodity support from Saudi Arabia and the UAE worth $ 2.5 billion to provide fuel, wheat and medicine.

Speaking to Al Jazeera Net, Hussein said that the nearest budget for comparison will be the 2018 budget, because the previous year and as a result of external support the deficit was weak in the range of $ 1.3 billion (exports of $ 2 billion and imports of 3.3 billion.

The adviser prefers to bet on the support of the Gulf states because European countries - by experience - is difficult to support unelected systems. He believes that Sudan's borrowing from the International Monetary Fund will face US sanctions, whose renewal after the revolution was "frustrating".

Hussein warns that the recipe for the Fund to raise government subsidies will be harsh on Sudan, in light of high inflation and the absence of significant Arab support as happened to Egypt.

Between two options
The former Minister of State in the Ministry of Finance Izz al-Din Ibrahim that there are two tracks to finance the budget, one internal and the other external, warning of building on the latter because it concerns the political problem of lifting the US embargo.

"It is difficult to build a budget on items with question marks that may or may not come," Ibrahim told Al Jazeera Net.

It is advised to adopt internal resources and pressure of expenditures to besiege the large budget deficit due to the imbalance of the economy indicators of hyperinflation and deterioration of the pound, which leads to negative growth.

However, the former minister is assured that the balance of payments deficit does not exceed $ 30 million, because it is not only accounted for by exports and imports, but also includes remittances from expatriates, foreign investment flows and others.

One of the main challenges facing the 2020 budget will be to raise public sector wages to between 8 and 9 thousand pounds ($ 177-200), which raises the wage mass to 45 billion pounds annually ($ 1 billion).