Home | News    Wednesday 18 April 2012

Sudan’s projected economic contraction in 2012 worse than expected

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April 17, 2012 (WASHINGTON) – The International Monetary Fund (IMF) on Tuesday revised down its forecast to Sudan’s economy to show a significant shrinkage in 2012.

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International Monetary Fund Managing Director Christine Lagarde speaks at the Brookings Institution April 12, 2012 in Washington, DC. (AFP)

According to the latest release of the World Economic Outlook (WEO), the East African nation achieved a -3.9% growth in 2011. The figure includes South Sudan only up until July 2011 when the country officially broke into two.

In 2012, Sudan’s economy will contract by -7.3% before improving in 2013 to -1.5% and to 1.7% in 2017.

The loss of oil-rich South Sudan last year meant that Sudan no longer has access to billions of dollars worth of crude reserves. Oil was the main source of foreign currency and revenues for Sudan prior to the country’s partition.

To make matters worse, South Sudan managed last week to take over one of Sudan’s major oilfields of Heglig in South Kordofan through a military occupation that took everyone by surprise. Analysts say that damages to the facilities in the area, which produces half Sudan’s oil, as a result of military operations means that production will not resume anytime soon.

Furthermore, landlocked South Sudan shut down its own roughly 350,000 barrels per day in January in a row over how much it should pay to export crude via Sudan.
The latter has built in oil transit fees as part of its budget at the rate of $36 per barrel.

Khartoum has undertaken measures since last year in anticipation of the sharp curtailment in revenues. This includes cutting government spending, partially lifting subsidies and banning a wide range of imports to stop depletion of foreign currency reserves.

But nonetheless, food prices soared to unbearable levels for many citizens prompting limited demonstrations in the Sudanese capital last year. The exchange rate of the Sudanese pound also deteriorated to unprecedented levels amid sharp shortage in hard currency which further fueled price hikes.

The IMF projected consumer prices in Sudan to increase by 23.2% in 2012 and 26.0% in 2013, which is the highest in the Middle East region.

Sudan has turned to a number of friendly nations seeking help to shore up its budget deficits and boost its foreign currency reserves directly or through investments. So far only the Arab Gulf state of Qatar made a $2 billion pledge to assist in the form of buying Sudan government bonds and investments in several economic sectors.

Sudanese officials assert that their country will overcome the loss of oil revenue by exporting more gold and revamping the agricultural sector.

However, this week the Sudanese finance and national economy minister Ali Mahmood Abdel-Rasool said that the 2012 budget as it stands is unsustainable and needs to be amended.

The pro-government al-Rayaam newspaper reported that the Sudanese parliament is poised to approve a second round of lifting subsidies on fuel amid strong objections from the labour union.

(ST)

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  • 18 April 2012 05:45, by LL Reuben

    IMF is wasting time doing survey of the so-called Sudan. Sudan is going down the drain. Those who like to survey should wait for Umaar Bashiir exit otherwise nothing tangible will come Sudan way while fugive Bashiir is still chanting Allo-akbar and directing traffic. Sudan doesn’t have any existing economy beside South Sudan oil. God bless South Sudan.

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    • 18 April 2012 06:16, by Msudi

      LL Ruben,
      IMF and likes are frustrated because Khartoum is unable to pay back theirs.
      In RSS , no international debts and Khartoum is the loser in this war that they have instigated
      ’Aluta continua’
      Msudi

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      • 18 April 2012 06:57, by LL Reuben

        Msudi,

        Khartoum is indeed the loser, unfortunately folks in the North don’t look at Bashir as a dying horse kicking. They still think he’s still the same man who took power in ’89 with the help of today’s nobody, Hassan Turabi who’s too frail to even talk.

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        • 18 April 2012 08:43, by sober

          Im not an economist and have to do nothing with figures but I can see main cities in south Sudan died with hunger.

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  • 18 April 2012 09:06, by Sundayw

    Sudan economy is built to collapse or enrich few. Bashir and his cohorts have been looting the money gained from stealing oil in South’s well located in Panthou. If they had known we will retake ours lands, they should have put that money in reserve instead of stealing it. Now, it is payback time and this is the unpleasant side of being too greedy.

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    • 18 April 2012 10:30, by Dinka Aliap Chawul

      Do u know whereabout of NS,Emad,Corrector,jallabia and the likes?

      I’d happily tells u that Mr jallabi,Corrector and ns died of strokes on monday,Emad is running naked now in Khartoum coz of physcological problems coz lose of Panthou to right owners,M.Ali atleast is been hospitalise after suffering hypertension.Please guys pray for MA only coz he’s a moderate but pray for the death of Emad.

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  • 18 April 2012 10:52, by Hitler

    Captain of the ship of this economic crisis if Bashir al Luti. Ship without life saving gear for most sudanese on board. Is this reminiscent of Titanic. Now time is ripe for us to bring down this govt. at all cost less we all get shipwrecked to the bottom of economic sea. HOW MANY SUDANESE HAVE GUTS TO TAKE BASHIR DOWN? NO ACTION WILL MEAN SUDANESE WILL BE ENERGY SOURCE IN 1312. INCREDIBLE VISION.

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  • 18 April 2012 12:14, by Emmanuel Ajang Solomon

    Sudan is big and have no problem with the South, only South have problem of its place being occupy by the Khartoum for quiet a long time and Khartoum wa s saying the Southners will not asked for their boarders because the small oil will make them fight each other and we shall keep on like that until we bring our own Goverment who will accept36$.

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