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Sudan Fiscal Trends & Future Reforms

Explore Sudan's fiscal landscape, including rising oil revenues, expenditure challenges, and reform prospects for sustainable economic growth. Learn about fiscal constraints and strategies for managing subsidies, expenditures, and revenue diversification.

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Sudan Fiscal Trends & Future Reforms

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  1. SUDANFiscal Trends, Constraints & Prospects Paris, March 9, 2006

  2. Sudan-fiscal • Trends • Prospects • Reforms • Challenges

  3. Fiscal trends—revenues • Oil revenues have risen rapidly

  4. Fiscal trends—revenues • ...and non-oil revenues have shown an improving trend

  5. Fiscal trends—revenues • Oil fund savings have continued, after the CPA

  6. Fiscal trends—expenditures • Expenditures have risen rapidly in recent years

  7. Fiscal trends—expenditures • The fuel subsidy is high and does not benefit the poor • Gasoline (benzene) prices have a low subsidy • but Diesel (gasoil)—the main fuel—is heavily subsidized and the subsidy does not necessarily benefit the poor in agriculture or urban areas

  8. Fiscal trends—space • ...overall, despite increases in revenues, the fiscal space has shrunk because of the CPA and decentralization

  9. Fiscal prospects—2006 • Fiscal deficit falls: 1.8% of GDP in 2005 to 0.9% in 2006 • Oil output up 70% in 2006, but lower quality of new crude means less than proportionate increase in govt. revenues • Non-oil revenues rise on administrative improvements and exemptions removal • Oil fund savings of 1.4% of GDP

  10. Fiscal prospects—2006 • High expenditure allocation to south (CPA) and northern states (decentralization) • Significant increase in development expenditures at federal and state levels • Fuel subsidy remains high

  11. Fiscal prospects—macro-structural reforms • Protect the tax base • Revamp tax incentives (VAT and profit tax holidays) • Oil transparency • Regular and transparent profit transfers from oil companies to the treasury • Capacity in public financial management • Public Expenditure Review • Improve fiscal transparency • GFS reporting and operationalizing the FFAMC

  12. Other fiscal reform challenges • Address the fuel subsidy • From a macroeconomic view, the increase in spending at all levels of govt. calls for sound expenditure management systems (GFS): • Coordinate budget formulation and classification; design effective public procurement system • Improve flow of information and reporting • Ensure tracking and auditing

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