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Former Sudanese official says loan from China needed for budget deficit


December 21, 2008 (KHARTOUM) –The Sudanese government has limited options to deal with the growing budget deficit, a former Sudanese official said today.

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Sudanese president Omar Al-Bashir, right, meets with Chinese President Hu Jintao, left, upon his departure ending a two day visit in Khartoum, Sudan last year (AP)

The former finance minister Abdel-Wahab Osman suggested to the pro-government Al-Rayaam daily in an interview that the revenue portion of the budget is likely to face issues in light of the continuous decline in oil prices.

“The only option before the government to face the drop in oil prices and clear the budget deficit is to receive an external loan particularly from China” Osman said.

He further noted that China foreign currency reserve that surpasses $1.8 trillion enables it to assist Sudan with the budget deficit.

The price of oil plunged under $34 last Friday for the first time for more than four and a half years despite huge production cuts initiated by OPEC. This is in sharp contrast to the all-time peak price of $147.27 reached July 11.

Oil exports represent 65% of revenue for Sudan and helped fuel its unprecedented economic growth despite US economic sanctions

Sudan adopted a new 2009 budget that forecasted a 44% drop in its oil exports revenue to $3.6 billion in 2009, down from $6.4 billion. This year’s budget introduces tax hikes to offset the shortfall in oil revenue.

The changes include a 20 % increase in telecoms Value Added Taxes (VAT), up from 15 per cent in 2008, and a new 5 per cent "development tax" on some imports, Reuters reported.

Al-Rayaam said that a committee within the ministry of economy met to come up with recommendations to deal with falling oil revenue.

However an unidentified government official told the newspaper that it is unlikely that there would be any new tax increases or public borrowing. He did not say what alternative methods would be used by Sudan for the revenue shortfall.

Last year the independent Al-Sahafa newspaper revealed that a Sudanese delegation left for China to request a $2 billion loan for the 2007 budget deficit.

It is not clear if Beijing, the closes ally of Khartoum, approved the request.


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  • 22 December 2008 10:26, by kelvin

    China has in the past and is at present and in the future be Sudan ally and friend. No other countries has stood behind Sudan when she is in need of financial aids. This we cannot dispute. Look at the past, China has been providing loans to Sudan when she is in need of money to administer and run the country, without which the people including myself will be worse off than we are today.

    So what we as Sudanese to show our gratitute to China for her good deeds. Firstly we should not go around kinaping their people who are here working to develop this country of ours, secondly we have to ensure their presence here and their working environment are safe and conducive to work and thirdly we have to provide them assistance in all government matters so that they will continue to be our ally and friend. These are little things we can do for the start.

    repondre message

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