Current Budget: Wages Increase Amid Economic Challenges

Sudanhorizon– Nazik Shamam

It was noteworthy that the 2026 fiscal year budget included a provision to improve the salaries of government employees, coinciding with the state of emergency imposed by the Sudanese government due to the war, which is nearing its third year since its outbreak in April 2023.

This war has, in turn, depleted government revenues, with most of them being directed towards the military effort, making a salary increase for government employees unexpected under these difficult economic circumstances.

Positive Developments in the Budget:

On Tuesday, the Council of Ministers approved the emergency budget for the 2026 fiscal year. The Minister of Finance and Economic Planning, Dr. Jibril Ibrahim, revealed positive developments in the upcoming year’s budget, including improvements in wages, salaries, and pensions, in addition to creating entry-level jobs and the absence of any new tax burdens.

The Minister pointed to the expansion of the revenue base through horizontal expansion and the avoidance of imposing any new tax burdens on citizens. He also mentioned the expansion of healthcare services to include more families in the basic and supplementary packages through health insurance, localizing treatment within the country, and continuing to fulfill the government’s obligations towards health insurance and pensions.

Ibrahim described the budget as unconventional, focusing on mobilizing domestic resources and directing them primarily towards the requirements of the war effort and prioritizing spending on providing essential services in war-affected states, such as water, electricity, health, and education, while continuing to create an environment conducive to the return of citizens to their homes.

The Minister of Finance revealed the most important macroeconomic indicators of the budget and projections of relative economic stability based on a number of structural economic reforms that began implementation in 2025.

Growth Rate:

The new budget aims to achieve a GDP growth rate of approximately 9% and a decrease in the average inflation rate to 65% in 2026, compared to 101.9% in 2025.

The Pound’s Depreciation:

With the continued depreciation of the Sudanese pound against foreign currencies, the dollar has soared to over 3,500 pounds, compared to 560 pounds before the war. The living conditions of government employees have deteriorated due to the decline in the value of wages, which are no longer sufficient to meet their basic needs amid soaring market prices.

Previous Increase:

The last wage increase for government employees occurred in 2020. The government approved a seven-fold increase in the minimum wage in an attempt to mitigate the burden on citizens resulting from price fluctuations and rising inflation. At that time, the government raised the minimum wage from 425 pounds (US$8.70) to 3,000 pounds (US$61.30).

Details of Wages:

The currently approved budget does not disclose any details regarding wage improvements or the value of the minimum wage it intends to implement in the coming months.

Last September, Finance Minister Jibril Ibrahim stated that his ministry had successfully disbursed the full salaries for 2025, compared to only 60% in the previous two years.

Jibril explained that the ministry paid salaries in full (100%) in the 2025 budget, compared to 60% in the previous two years due to the war.

Context of Inflation:

Economic expert Dr. Mohamed Torshin told Sudanhorizon that the salary increase in the new budget comes amidst inflation, a decline in the exchange rate against other currencies, and a deterioration in government revenues, especially after the Rapid Support Forces militias seized control of the Heglig oil field and the gold mining sites in Jebel Amer and Sango.

Torshin pointed out that the salary increase will be implemented imprecisely, which will contribute to increased inflation and will not help address the Sudanese economy; rather, it will further complicate the economic situation.

He added that some may view this step as positive and contributing to raising employee morale, enabling them to return to work.

Restructuring:

For his part, economist Ahmed Bin Omar believes that the downsizing of the government apparatus due to the war, displacement, and job losses was a decisive factor in the current economic situation. He added that the government is currently paying salaries to fewer employees compared to before 2023.

Ben Omar told Sudanhorizon that this contraction in the workforce allows for raising the nominal salaries of the remaining employees without a corresponding increase in the total payroll. However, this is not new revenue, but rather a redistribution within a single budget item.

Ben Omar stated that the government can increase revenue by expanding the tax base horizontally, bringing commercial and service activities that were previously outside the formal sector under the tax umbrella, and improving collection coverage without changing the rates.

He added that the efficiency of tax and customs collection can also be improved, evasion reduced, procedures tightened, systems linked in certain stable states, and revenues obtained from companies and government entities, such as ports, mineral resources, and telecommunications.

This includes reinstating public fees and services, and partially resuming government transaction fees in relatively stable states.

Ben Omar warned that these pressures on expenditures, if the government does not improve its revenue-generating plan, could lead to a deficit that would be covered by printing money.

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