Tuesday 28 September 2021
The Sudanese economy will improve in 2022 on the condition that the political and security situation will remain stable, says economic expert Hasan Bashir.
In an interview with Radio Dabanga, Dr Hasan Bashir, Professor of Economics at El Nilein University in Khartoum, referred to expected loans, grants and investments that will contribute to the improvement of the economic conditions in the country.
The decrease in inflation rates and the trade balance deficit, as well as the stability of the forex rates are indications of an improved economic situation. “We can consider these developments an indication that the reform policy adopted by the government has begun to bear fruit,” he said.
“The International Monetary Fund (IMF) expected economic recovery and growth in the country next year. Yet, if the economic indicators remain stable until the end of the year, we can take it as evidence that the economic recovery has begun,” he noted.
The large shortage of foreign currency in the country has been reduced by loans, grants, and project funding in foreign currencies received from various international parties this year. So far, the total amounts to $4,165 billion, according to the economic forum held last month.
He also mentioned the positive effects of institutional reform, improved tax and customs revenues, and decreased gold smuggling. The government should also find a solution to the huge amounts of money outside the banking system, “even if they have to change the national currency”.
Bashir further expects another rise in inflation rates when the 2022 budget is implemented. “The cancelation of tax exemptions, the introduction of new taxes and fees, and the expected increase in salaries may negatively affect the inflation rates,” he explained.
The economist did not rule out that the current decline in inflation rates is a result to the continuing economic stagnation. “But the decline in inflation rates resulting from the improvement of the trade balance remains a good sign.”
He praised the ongoing institutional reform and capacity-building programmes of the government in cooperation with international financial institutions, the United Nations, and foreign companies. “The tax reform however should be done in a way that will limit the effects of the general budget on the rise in inflation rates.”
On the social effects of the economic measures taken by the Sudanese government this year, and in particular the lifting of subsidies on fuel, the economic expert confirmed that they have caused another decrease in the purchasing power of most Sudanese.
“The Samarat support programme and the My Commodities programme ease life somewhat, but are not sufficient,” he added. “So let’s hope our predictions will be true and the living situation will improve for the average Sudanese in 2022.”
Economist Sidgi Kaballo and financial analyst Hafiz Ismail earlier expressed their strong reservations about the government's economic policies. The removal of subsidies as conditioned by the IMF, is disastrous for the population, Ismail told Radio Dabanga in June. According to Kaballo, the government should have started with improving internal mechanisms before implementing the IMF conditions and remove subsidies on basic commodities.