By Nafisa Eltahir
KHARTOUM (Reuters) - Sudan will expand its use of gold exports to cover imports of essential goods as it embarks on a new 2022 budget without foreign aid during an economic downturn after a coup.
Billions of dollars of much-needed foreign assistance were cut https://www.reuters.com/world/africa/sudan-state-oil-workers-join-civil-disobedience-movement-association-2021-10-27 after the Oct. 25 military coup that ended a power-sharing arrangement with civilians in a transition process since the 2019 overthrow of former ruler Omar al-Bashir.
New directives call for 70% of gold export proceeds to be used on "strategic goods," which typically include fuel and wheat, and the remainder on "necessary goods," the finance ministry said in a statement late on Sunday.
Other directives aim to reduce the time and fees involved in the gold export process.
One of Africa's main gold producers, Sudan officially exported 26.4 tonnes in the first 9 months of 2021 and 25.2 throughout 2020, Central Bank data shows. But officials estimate four times more is smuggled abroad.
The budget passed last week aims to increase both expenditure and non-aid revenues by more than a third and envisages a deficit of 363 billion Sudanese pounds ($826.88 million), state news agency SUNA said.
Since the coup, the pound has slid from about 445 pounds to the dollar to 495 on Monday.
Civilian parties have accused military leaders of erasing economic gains and plunging the country further into crisis.
Aid had totalled $839 million in 2021, SUNA said.
Western nations and foreign financial institutions say aid will only return when there is a civilian-led government.
Finance Minister Jibril Ibrahim told Reuters https://www.reuters.com/markets/us/exclusive-sudan-cut-off-650-million-international-funding-after-coup-2021-12-08 in December the government would rely on Sudan's internal resources but not be able to cover all strategic commodities.
The United Nations estimates one in three people in Sudan will require humanitarian assistance this year, about 1 million more than last year.
($1 = 438.9995 Sudanese pounds)
(Reporting by Nafisa Eltahir; Editing by Andrew Cawthorne)