The Fedral Budget 2006

1. The Republic of the Sudan Ministry of Finance and National Economy The Fedral Budget 2006

2. Budget Cycle • Budget Circular Preparation (Aug.2006) • Circular Distribution . (Aug. 2006) • Meeting of Ministers, Undersecretaries and Public Corp CEOs (July- Aug 2006) • Preparation of Budget Main Indicators (July- Aug 2006) • Macro Framework & Sect oral Policies (July- Aug 2006) • Receipt, Review and Analysis of Budget (Sep 2006) • Proposals (Sep 2006) • Preparation of Basis for discussion of Proposals (Sep- Oct 2006) • Preparation of first Draft (Sep- Oct 2006) • Discussion of first Draft Proposals (Sep- Oct 2006) • Preparation of second Draft (Sep- Oct 2006) • Meetings with Trade Unions (Sep- Oct 2006) • General Briefing to Ministers of Finance at different States & Government of the South (Sep- Oct 2006) • Preparation of Budget Documents ( Oct 2006) • Discussion by Ministerial Committee for Economic Sector ( Nov. 2006) • Discussion by Political Bureau (Nov,2006) • Discussion by Service Sector Committee (Nov,2006) • Cabinet Discussions (Dec.2006) • Presentation to the Legislative Body Discussion by Legislative Body (Dec. 2006)

3. Challenges Confronting 2006 Budget • Financial commitments emerging from application of the CPA. • Bottlenecks in the infrastructure sector. • Arising unemployment rates. • Building strategic reserve to stabilize cereal prices. • Internal and external debt services.

4. Challenges Confronting 2006 Budget • Insecurity threats in some parts of the country. • Weak infrastructure particularly in the Rural areas. • Meager proceeds from non oil exportable.

5. Macro Economic Objectives for 2006 Budget • Sustaining the positive Economic Growth Rate through:- • Containing inflation rate. • Rationalizing the aggregate demand. • Financing public expenditure from real recourses. • Decreasing dependency on oil revenue and broadening the base for non- oil revenues. • Capacity building. • Structural reforms and good governance.

6. Macro Economic Objectives for 2006 Budget • Reducing Poverty through supporting social development programs, and concentrating on primary health ,basic education, water and sanitation. • Provision of micro finance, capacity building, supporting community driven initiative. • Internally displaced population programs.

7. Macro Economic Objectives for 2006 Budget • Supporting special groups such as female headed households, elderly, disable and children. • Supporting productive sectors through privatization. • Creation conducive environment and capacity building for the private sector. • Increasing transfers from the central budget to the states.

8. Macro Economic Objectives for 2006 Budget • Enhancing production and productivity through removing infrastructure sector bottlenecks (primarily river transport, railways, and port decongestion measures). • Enhancing rural productivity through building feeder roads, storage and marketing facilities …… etc. • Improving salaries and wages structures for both public and private sector employees and pensioners • Supporting developmental social funds.

9. Macro Economic Objectives for 2006 Budget • Expanding health insurance program to accommodate more families particularly in the rural areas .

10. Quantitative Objectives This include among others the following main objectives:- • Sustainable GDP growth rate at 8%. • Reducing inflation rate from 9.5% in 2005 to 8.8 % 2006. • Increasing transfers to states by 122% (from 39 Billion SD in 2005 to 86.6 billion SD). • Reducing mother mortality rate by 10%. • Reducing infant mortality rate by 7%. • Reducing children under 5 mortality rate by 10%. • Reducing girls circumcision rate to 4%. • Increasing family planning coverage to 13%. • Reducing malaria incidents by 13%. • Reducing incidents of HIV by 25%. • Increasing potable water coverage to 62% in both rural and urban areas. • Increasing gross enrolment rate from 75% to 80%, and drop-out from 40% to34%.

11. References The budget for the year 2006 is prepared within the framework of the following set of references • The comprehensive peace agreement (CPA). • The provisions of the transitional constitution. • The economic program of the second presidential tenure (2001-2006). • The directives of the quarter-century strategy (QCS). • The mid-term economic program (2006-2008). • The mid-term budget program (2006-2008).

12. Policy Framework • Formulating appropriate monetary policy that allow for the application of the dual banking system . • Coordinating foreign aid policies to ensure conformity between federal government and the states . • Continuing the restructuring of the banking system to comply with the requirements of the rural development , and rising the presence of banking system institution in the rural aeries. • Adopting criteria for application of good governance transparency and broad base participation. • Continuing privatization program to enhance the private sector involvement in the development process.

13. Policy Framework • Restructuring the civil services to improve its performance. • Revising the legal procedures . • Enhancing the capacities of small scale producers through qualitative improving in the investment laws to give more incentive for their activates . • Reforming and regulating markets channels , linking productive areas with the markets . • Supporting research and technology centers and linking them with the production process. • Strengthening accountability through supporting accounting and institutions at both central and state levels.

14. Policy Framework ( Cont) • Expanding the use of treasury and investment bounds as an alternative for deficit finance . • Expending taxation base and continuing custom duties reforms to raise non oil revenue.

15. Macro-economic Indicators 200-2006

16. Real GDP Growth Rate

17. Inflation & M2 Growth Rate

18. Exchange Rate

19. Budget Allocations

20. Budget Allocations

21. Budget Allocations

22. Budget Allocations (By Category)

23. Budget Allocations (By Category)

24. The Federal Development Budget The budget estimates for Chapter four for the financial year 2006 amount to 448,1 billion Sudanese Dinner compared to an estimate of 272,4 billion Sudanese dinner, and compared to an estimated actual development expenditure of 282.4 billion Sudanese dinner in year 2005 . This shows an anticipated increase of 59% . The breakdown of the 2006 budget estimates, according

25. The Federal Development Budget 289,952 million SD in local component and 158,096 million in foreign component . These estimates were based on the following guidelines:- • The objectives of the comprehensive peace agreement (CPA). • The JAM framework. • The interim PRSP. • The MDG`S pathway

26. The Federal Development Budget The priorities of the development budget estimate are: • Integrated rural development and food security projects. • Capacity building. • Primary health care. • Basic education. • Water and sanitation.

27. The Federal Development Budget 6. Rural feeder roads. 7. Railway and river transport. 8. Resettlement of IDPs and refugees. 9. DDR (reintegration of combatants into civil society). 10. Small and medium scale enterprises. It is worth mentioning that the above priorities are consistent with the JAM framework.

28. The Federal Development Budget Sectoral Distribution

29. The States Development Budget

30. MDTF Program 2006 (USD Million)

31. USD million

32. USD million

33. USD million

34. Thank you