KHARTOUM: Sudan has overcome the loss of South Sudanese oil, the finance minister said in presenting a new budget to parliament on Wednesday, despite 45 percent inflation and a currency at record black-market lows.
Finance Minister Ali Mahmud al-Rasul said growth will reach 1.4 percent this year and will rise to 3.6 percent in 2013 figures which contradict International Monetary Fund estimates for a contraction in 2012 with the economy holding roughly steady next year.
IMF sees Sudan's growth falling by 11 percent this year and hovering around zero in 2013.
South Sudan separated in July last year with roughly 75 percent of the 470,000 barrels per day of oil produced by the formerly-unified country.
The lost crude accounted for most of Khartoum's export earnings and half of its fiscal revenues.
Without its largest source of hard currency, which is needed to pay for imports, inflation has soared and the Sudanese pound has plunged in value while the government tries to boost exports of gold and other non-petroleum products.
"The 2013 budget shows that we have overcome the secession of South Sudan," Rasul said.
But El Shafie Mohammed El Makki, head of political science at the University of Khartoum, said the budget will not address a deteriorating economy in which people are struggling to survive.
"It is (a) very serious situation," he told AFP.
A September agreement between Sudan and South Sudan included a financial package worth about $3 billion in southern compensation for the oilfields Sudan lost at separation.
The two sides also agreed on fees for exporting the South's oil through northern pipelines for export. South Sudan halted oil production in January after accusing Khartoum of theft in a long-running fee dispute.
Those and other deals have not yet been implemented, and Rasul told parliament that his 2013 budget does not include any oil transit fees from South Sudan.
Neither will there be a further reduction in subsidies for the domestic oil market, he told legislators.
As part of measures announced in June to address the fiscal imbalance, Sudan raised the pump prices of fuel by about 50 percent under a phasing out of petroleum subsidies which had been set this year at 2.2 billion pounds ($338 million at the current black market exchange rate).
Anti-inflation protests followed, with Arab Spring-inspired calls for the downfall of President Omar al-Bashir's 23-year regime. The scattered protests petered out following a security clampdown.
Reducing the subsidies was part of a reform package which the IMF called an important step to restoring economic stability and reducing dependence on oil.
Along with a phasing out of subsidies, the government raised taxes, devalued the currency and increased social spending.
An IMF staff report in September said restoring economic stability would require "strong and determined implementation" of those measures.
It urged the 2013 budget to maintain "the subsidy reform momentum".
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