banking

World Bank head sees situation in Sudan improving, urges patience

October 3, 2021

(Reuters) - Sudan is making progress as it reconnects with the global economy but patience is needed as the country seeks to tackle shortages and attract investment, the head of the World Bank said on Thursday during a visit to Khartoum.

Sudan's economy has been mired in a crisis that led to the overthrow of former leader Omar al-Bashir in 2019 and has continued since.

Inflation slowed slightly last month to 388% and a sharply devalued currency has shown signs of stabilising. The trade deficit declined 43% year-on-year to $1.2 billion in the first half of 2021 while remittances rose to $717 million from $136 million over the same period, Prime Minister Abdalla Hamdok said on Thursday.

However, many Sudanese are struggling with poverty, shortages of medicines, and power cuts.

'Sudan is making a transition from a violent situation, from a situation of shortages to the situation that is gradually improving,' World Bank President David Malpass said after meeting Hamdok.

'It takes time to go through this process and it will be important for people to approach it with patience and with tolerance for each other knowing that the whole that Sudan's building -- a nation -- is going to be stronger than the individual parts.'

Earlier this year Sudan paved the way for extensive relief on more than $50 billion in foreign debt by enacting rapid economic reforms, unlocking access to international financing.

Hamdok said Sudan hoped to reach the point where reforms are felt on the ground 'very soon'.

'The Sudanese people have borne a very high cost of the reforms and we cannot take their patience for granted,' he said.

Over the next year the World Bank says it will commit about $2 billion in grants to help tackle poverty and inequality, and boost growth.

In the next two months, Sudan would receive $500 million in budget support, plus $300 million for electricity improvements and $300 million for irrigation projects, regional World Bank official Hafez Ghanem said.

Malpass is the bank's first president in decades to visit Sudan, which faced extensive sanctions under Bashir. The World Bank has also helped plan and finance a temporary basic income scheme that is being gradually rolled out in some parts of the country.

That scheme, known as Thamarat, is suffering from delays due to issues with registration and payment systems, Malpass said late on Thursday. Finance Minister Jibril Ibrahim said more than 8 million people had registered for the programme but not all had received any money.

Malpass also noted that although bread and fuel supplies had stabilised following price hikes, Sudan continues to suffer from shortages of heavily-subsidised electricity, which he said could be alleviated if it became more expensive.

'When we can provide consistent production then we can think about the prices,' Ibrahim said in response.

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