The Sovereign Council and the cabinet of Sudan approved the 2021 budget in a joint meeting. It is the country’s first general budget after the US removed it from the list of states sponsoring terrorism.
The Minister of Finance, Hiba Ali, said the joint meeting gave final approval to the country’s 2021 budget.
“The 2021 budget is the first after the signing of the Juba peace deal, and the removal of Sudan from the (US) list of state sponsors of terrorism,” Finance Minister Hiba Ali was quoted as saying.
Ali said Sudan “will take full advantage of all the opportunities created by Sudan’s removal from the terror list which includes openness to the international financial system, and influx of foreign investments.”
The statement said the budget will reduce government spending by 24%, while increasing the tax base by 60%.
In addition, the budget allocates an amount of 54.1 billion Sudanese pounds ($983.63 million at the official exchange rate) for expenditures and peace-building-related projects. This includes 13.3 billion pounds for an annual fund Sudan agreed upon with the rebels last year.
The statement said the defense sector received 12.4%of the budget, the health sector 9%, and education 12.5%.
Khartoum allotted over 54 billion pounds, or $976 million, to peace-building and developing regions that were marginalized and conflict-ridden, the finance minister said.
The Sudanese economy is experiencing a severe crisis, as the inflation rate reached 269% last December.
In addition to the scarcity of basic materials and power cuts, the government hopes to reduce the inflation rate to 95% by the end of 2021.
The US dollar officially trades at around 55 Sudanese pounds. However, but in the parallel market it can be as high as 270 pounds. This is a drop of more than 10% since the beginning of the year.
Sudan’s transitional administration, which took over months after Bashir’s ouster, has been pushing to rebuild the beleaguered economy.
In December, Washington removed Khartoum from its blacklist as part of a quid pro quo for the East African country normalizing ties with Israel. This move removed obstacles to international investment in the country.
In October, Sudan’s government signed a landmark peace deal in Juba with rebels in three main conflict zones.