Sudan requests $2 billion from World Bank to fund economic rescue plan

Sudan requests $2 billion from World Bank to fund economic rescue plan
The new economic regime will see fuel and bread subsidies remain.
2 min read
23 September, 2019
Prime Minister Hamdok has said Sudan need $8 billion in foreign aid [Getty[
Sudan will start a nine-month economic rescue plan next month and is asking the World Bank for $2 billion to help fund it, the country's finance minister said on Monday.

The reform plan will see fuel and bread subsidies remain for the next nine months, while Prime Minister Abdalla Hamdok's government ultimately aims to scrap them at the end of the programme.

Cuts to Sudan's bread and fuel subsidies last year were one of the main economic triggers behind the eruption in December of protests that led to the ousting of former President Omar al-Bashir in April and the subsequent formation of Hamdok's transitional government this month.

The subsidies will be replaced with direct cash transfers to poor families, Finance Minister Ibrahim Elbadawi told Reuters on Monday.

The new prime minister, a former United Nations economist, has earlier stated that fixing Sudan's economy is one of his key priorities in government.

Elbedawi said that the nine-month economic plan would aim to alleviate rampant inflation while maintaing supply of basic goods.

The plan will aim to restructure Sudan's budget. Hamdok has previously pointed to military spending, which makes up a majority of government spending in Sudan, as a key area for reform.

Bringing an end to conflict in Sudan's Darfur, Blue Nile and South Kordofan provinces will free up the budget from hefty military spending, Hamdok has said.

"It aims… to restructure the banking sector, rationalise government spending, address the state's financial burden and review tax exemptions, because 60 percent of economic activity is tax exempt," Elbadawi said. 

Hamdok is currently seeking a flow of billions of dollars in order to import basic goods including fuel and flour.

In New York for the United Nations General Assembly, the prime minister will ask the World Bank for $2 billion in aid.

Last month Hamdok said Sudan would need $8 billion in foreign aid in total.

But his government has so far been unable to tap into the reserves of the World Bank and International Monetary Fund as the country is still listed on the United States State Sponsors of Terrorism list.

"American officials have informed us that removing Sudan from the US terrorism list is complicated because it is tied to Congress and could take nine months to a year," Elbadawi said.

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