When South Sudan seceded, Sudan lost almost 50% of its revenues and 80% of its foreign currency.
Figure 1: Government of Sudan revenues since 2005
Source: IMF datasets
Oil exports plunged to zero and refinery sales fell by more than half.
Remember, Sudan is under financial sanctions and cannot turn to the IMF for assistance to see it through the economic shock.
Figure 2: Government of Sudan expenditures since 2005
Source: IMF datasets.
Notice how capital spending hardly grew during the CPA Interim Period: the growth in spending was entirely on wages and transfers to the northern states and the Government of Southern Sudan, plus—in 2011-12—fuel and food subsidies. The only cutback immediately after the independence of the South was the end of the transfers to the GoSS. This is the background to the austerity measures of 2013, that brought people out onto the streets in protest.
More important for President Omar al Bashir than the shortage of money is the fact that the squeeze is where it hurts him most: the discretionary budget available for him as ruler. How does he obtain his “political budget” necessary to stay in power? That is the topic of the next (penultimate) post.
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