September 4, 2013 (KHARTOUM) – The leadership council of the ruling National Congress Party (NCP) headed by president Omer Hassan al-Bashir met until the early morning hours of Thursday to discuss the country's economic situation amid reports that the government is close to kicking off another round of subsidy cut on fuel.
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- Sudanese presidential assistant Nafie Ali Nafie (Reuters)
Sudan official news agency (SUNA) said that the NCP expressed optimism about the execution of the economic reform program which aims to boost revenues and cut expenses through policies that encourage exporting and production.
The NCP deputy chairman Nafie Ali Nafie said they heard a report from the party economic sector and its five committees that were tasked last year with providing insights and analysis of the economic situation and the challenges faced in various fields in order to provide recommendations.
Nafie said they asked the economic sector for ideas on some measures that could help improve the balance of payments and policies that will increase production for the next year.
The NCP leadership council also asked for development of precise details on the proposed program in the form of a matrix that would later be presented to them for further discussions.
Nafie said that economic reform is now easy to attain in light of the good rainfall and improved relations with South Sudan.
The senior official made no mention of plans to further remove fuel subsidies as mentioned by some of his peers last week as an inevitable move.
The governor of Sudan Central Bank Mohamed Khair al-Zubeir was quoted by pro-government Akhbar Al-Youm newspaper on Sunday as saying that the decision to remove fuel subsidies could happen at any moment now.
Al-Zubeir noted that Sudan imports petroleum worth $4.1 billion which he said never happened in the history of the country before.
Unlike Nafie, he warned that the economic picture is unlikely to change before three years and will be contingent upon boosting oil production.
The Central Bank governor stressed that the balance of payment reached a critical stage with imports at $8 billion which is twice its export figures.
In separate statements, the finance and national economy minister Ali Mahmood Abdel-Rasool revealed that Sudan sells oil for $49 a barrel while buying it for at least $100 adding that this part of this subsidy goes to undeserving people requires restructuring of the subsidy system.
Sudan lost 75% of its oil reserves after the southern part of the country became an independent nation in July 2011 denying the north billions of dollars in revenues.
Prior to the country's breakup, Sudan produced close to 500,000 barrels but now its output is limited to 140,000 barrels per day. Oil revenue constituted more than half of the Sudan's revenue and 90% of its exports.
Per cooperation deals signed between Khartoum and Juba the latter pays a fee to the Sudanese government for the use of its pipelines and oil installations in exporting its crude.
Following the independence of South Sudan in July 2011, Khartoum was forced to introduce a contractionary budget that saw the partial lifting of fuel and food subsidies which triggered rare but small demonstrations across the country.
The government defended the measures saying that the country can no longer afford to pay for these subsidies.
The World Economic Outlook (WEO) released by the International Monetary Fund (IMF) last April Sudan's economy shrinking by -4.4% last year.
In 2013, Sudan is expected to achieve a 1.2% growth which is higher than the -0.6% projected by the IMF last year. Next year's GDP is also forecasted to stand at 2.6% which is slightly better than the 2.1% predicted in the IMF last assessment of Sudan's economy.
(ST)