- Title: Sudan cut off from $650 million of international funding after coup
- Date: 8th December 2021
- Summary: KHARTOUM, SUDAN (DECEMBER 6, 2021) (REUTERS) (SOUNDBITE) (Arabic) SUDANESE FINANCE MINISTER, JIBRIL IBRAHIM, SAYING: "We hope, we hope, that our neighbours in the Gulf (could offer assistance), whose economic situations are no longer as they once were, but compared to others they are in a much better position." KHARTOUM, SUDAN (DECEMBER 8, 2021) (REUTERS) TRAFFIC IN STREET
- Embargoed: 22nd December 2021 15:09
- Keywords: Finance Minister Foreign Aid Military Takeover Projects Sudan
- Location: KHARTOUM AND QADARIF, SUDAN
- City: KHARTOUM AND QADARIF, SUDAN
- Country: Sudan
- Topics: Africa,Government/Politics
- Reuters ID: LVA005F76GJEV
- Aspect Ratio: 16:9
- Story Text: Sudan was unable to access $650 million in international funding in November when assistance was paused after a coup, the finance minister of the dissolved government said - a freeze that puts in doubt basic import payments and the fate of economic reforms.
The financing included $500 million in budget support from the World Bank and $150 million in special drawing rights from the International Monetary Fund, said Jibril Ibrahim, who was appointed to a civilian transitional government in February.
Foreign funding was seen as crucial in helping Sudan emerge from decades of isolation and supporting a transition towards democracy that began with the 2019 overthrow of Omar al-Bashir.
The Oct. 25 coup upended that transition. The United States has put on hold $700 million in economic assistance since the coup and the World Bank, which had promised $2 billion in grants, has paused disbursements.
Before the coup, the inflation rate, one of the highest in the world, had begun to fall, and the exchange rate had stabilized following a sharp devaluation in February.
Around the time of the coup, Sudan had enough reserves to cover just two months of strategic imports, a former official said.
Jibril, a former rebel leader who secured his ministerial role through a peace deal and expects to retain it, said he hoped international support would return gradually over the next three to six months and that meanwhile bills could be paid and reforms would continue.
"Basically we depend on tax, customs, and gold revenues and on different (state) companies working in various fields," Jibril said in an interview at the Finance Ministry in Khartoum. For imported basic goods, such as flour, fuel, and medicine, "we cannot cover it completely, but the majority of the strategic commodities we can cover with our exports," he said.
The government had begun to reduce its trade deficit through tax and customs reforms, but those revenues were interrupted by a blockade at Port Sudan before the coup. A further blockade has been threatened.
Jibril said the main impact of the freeze in international support would be on development projects covering water supply, electricity, agriculture, health, and transport. An internationally funded basic income programme to lessen the impact of subsidy reform has also been frozen.
Sudan's 2022 budget was being planned with no allowance for international assistance, Jibril said, but with a target of sticking to a 1.5% deficit limit defined under an IMF financing programme. Projected growth for 2022 could fall from 3% to 1.5-2%, he said.
Jibril said Sudan would seek investment rather than grants from wealthy Gulf Arab states that now face their own economic challenges.
(Production: El Tayeb Siddig, Seham Eloraby) - Copyright Holder: REUTERS
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