The normalization bargaining is strongly present .. Will the visits of US officials take away Sudan’s budget for 2021?

For the first time, a new year has entered the country without the government of Sudan permitting the financial budget, which - according to experts - was awaiting visits by American officials, which began on Wednesday with a visit by US Secretary of the Treasury Stephen Mnuchin, and ends today, Thursday, with the visit of the President of the American Export-Import Bank, Kimberly Reid.

On Wednesday, Sudanese Finance Minister Heba Muhammad Ali and the US Treasury Secretary signed a memorandum of understanding to liquidate Sudan's arrears to the World Bank and enable Sudan to obtain more than one billion dollars annually.

Although the agreement - according to the Sudanese Ministry of Finance - guarantees the provision of financing facilities to pay Sudan's arrears to the World Bank, and thus its access to more than one billion dollars annually in soft loans, experts fear its consequences and consequences.

Economist Wael Fahmy believes that the memorandum of understanding facilitates dealing with international financial institutions, and this of course requires Sudan's commitment to the World Bank's package of conditions for liberalizing goods and services and floating the national currency, the "pound".

Bargaining for normalization

Fahmy notes that the "bridge loan" contained in the agreement between the Sudanese ministries of finance and the US Treasury, amounting to more than one billion dollars, will not be included in the 2021 budget, but will go directly to pay Sudan's arrears to the World Bank.

Fahmy added - in an interview with Al-Jazeera Net - that the bridge loan is simply a transfer of the debt of the World Bank to the US government, and does not mean canceling the debt that will be paid by the treasury of Sudan in the future.

A bridge or bridge loan is a temporary loan that allows the borrower to meet urgent obligations to provide cash flow. These loans serve to "bridge the gap" of time associated with the need for financing.

The US loan will pay back Sudan's arrears to the World Bank Group, thus making it easier for Khartoum to obtain concessional development loans.

The Sudanese Minister of Justice and the US Treasury Secretary sign the "Abraham Agreement" (communication sites)

The economist says that normalization with Israel is the main and central goal of this bridge loan game, as he put it.

And the US embassy in Khartoum announced in a tweet on Twitter that Sudan signed with the United States on Wednesday "the Abraham Accords", according to which Khartoum agreed to normalize its relations with Israel.

Wael Fahmy confirms that the issue of the liberation of Sudan from the World Bank is a cover and a representative one in his estimation, because the bridge loan may be demanded by Washington to repay it via gold or oil.

Secret Budget

The Forces of Freedom and Change (the ruling coalition) are reluctant to implement the 2021 budget, in light of speculation indicating that there is a declared budget and a secret one that relies on liberating fuel, electricity, cooking gas, bread flour and medicine, and floating the pound.

A member of the Economic Committee for the Forces of Freedom and Change, Issam Ali Hussein, believes that the agreement signed yesterday between Sudan and the US Treasury is part of a complete package with the World Bank that includes lifting subsidies even on education and health.

Hussein tells Al-Jazeera Net that there is an integrated program of the International Monetary Fund on its way to enforcement in Sudan, which may strengthen the speculation of the entry into force of a secret budget that depends on the floating of the pound, bringing its exchange rate against the dollar to 260 pounds instead of 55 pounds fixed in the announced budget.

He confirms that Sudan is not in need of the American loan in exchange for implementing policies that have proven to be unsuccessful since the 1970s, as well as the absence of guarantees of payment commitment, as happened in the Oslo 2005 donors ’conference with $ 11 billion, from which Sudan received only $ 633 million.

Proven recipe

Although the economist Wael Fahmy refers to $ 700 million with which the United States directly supported Sudan's budget, he expects the liberation of goods and services to comply with the conditions of the World Bank, which will receive one billion dollars from Washington to lift its blockade on Sudan.

He clarifies that avoiding the removal of government subsidies on goods and services will only be done by the government’s attempt to convince the World Bank of other treatments, which is unlikely.

Because the World Bank's prescription is clear in this regard to ensure the recovery of its loans.

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Hamdok discusses developing cooperation in the fields of economy, trade and investment between Sudan and America The Prime Minister, Dr.

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Posted by Prime Minister's Office - Sudan on Wednesday, January 6, 2021

During the year 2020, the Sudanese government liberalized fuel, as well as allowing bakeries to produce unsupported commercial bread, raising electricity tariffs by 500% and cooking gas by 200%.

Fahmy excludes the government, in the new budget, to float the pound, because the budget has fixed the customs dollar and the dollar exchange rate.

Which means a lot of control.

According to reports, the budget approval was delayed pending the visit of the US Secretary of the Treasury and the President of the US Export-Import Bank, who visited Khartoum today, Thursday.

Talk of numbers

Wael Fahmy expects that the results of economic instability will be present in 2021, because the new budget structures regarding revenues and expenditures are the same as in previous budgets during the era of ousted President Omar al-Bashir.

He warns that the 2021 budget - according to the draft he reviewed - came as a war budget with an increase in spending on the defense and security sectors.

He continues, "For example, the budget for the Ministry of Defense has been increased by 173%, while the education budget has been reduced by 58%."

The agreement allows Sudan, Israel and other signers of the Abraham Accords to build mutual trust and increase cooperation in the region.

- US Embassy Khartoum (@USEmbassyKRT) January 6, 2021

But Fahmy returns and says that the new budget for the first time achieves a surplus of about $ 3 billion.

The budget targeted an exchange rate for the dollar of 55 pounds, and the price of the customs dollar at 15 pounds, a growth rate of 1%, and an inflation of the two-digit barrier of 95%, which is excluded by Fahmy in light of the chaos of inflation, which recorded in November 254.23%.

It is noteworthy that the Ministry of Finance and Economic Planning signed today, Thursday, a memorandum of understanding with the American Export and Import Bank (AXIM) to support the financing of US exports and investments in Sudan, worth one billion dollars.

The memorandum of understanding stipulated that the two sides would agree to determine the projects that will be financed through the bank in the fields of infrastructure, agriculture, energy, mining, communications and medical care.