(Bloomberg) --

Economists slammed as unworkable Sudan’s 2022 budget that seeks to more than double tax revenue to replace foreign aid suspended after October’s coup, saying it was likely to fuel more turmoil and anger against the ruling military.

The impoverished North African country, which looked like rejoining global markets after the 2019 overthrow of dictator Omar al-Bashir, has revised down its growth target to 1.4% and is racing to find the means to fund this year’s expenditure of 3.69 trillion Sudanese pounds ($8.3 billion). The U.S. and other donors say a civilian-led government must be restored before they resume financial support.

But plans that include a 145% rise in tax revenue to 1.9 trillion pounds and increasing gold exports to cover key commodities like wheat and fuel may face difficulties. Rampant smuggling can dent Sudan’s income from natural resources, while a population suffering from inflation in excess of 300% and low wages means there’s little tax base to draw from.

Turning to domestic revenue “is unrealistic given the current economic and political crisis,” said Zaynab Mohamed, an analyst at NKC African Economics, a South Africa-based research firm. With purchasing power declining and little support for military rule, tax hikes will push Sudan further into political turmoil, she said.

The Oct. 25 military takeover, which undermined plans for a transition to democracy after three decades of Bashir’s autocratic rule, has already taken a bloody toll. At least 76 people have been killed by security forces in near-daily protests in the aftermath, according to a doctors committee that supports the demonstrations. The United Nations this month began consultations with the army and its opponents in a bid to reach a political solution.

The putsch, which sidelined civilian politicians and led the U.S. and development agencies to suspend hundreds of millions of dollars in aid and budgetary support, is also hampering Sudan’s eligibility for $50 billion of debt relief under an International Monetary Fund initiative. Senior U.S. diplomats visiting Sudan last week also threatened targeted sanctions on unidentified individuals. 

General expenditure in Sudanese pounds rises by roughly a third in this year’s budget, although authorities sharply devalued the currency in February 2021. Summary documents don’t detail any specific tax increases nor break down spending by sector, but state some funding is earmarked for election preparations. 

Sudan has regularly spent significant annual sums on the military and security. The government said the budget seeks to direct financial resources toward reducing inflation, poverty and unemployment while boosting productivity in key industries.

“Sectors including agriculture, manufacturing are on the verge of stopping as there is no real administration” following the coup, said Mohamed Aljak, an economics professor at Khartoum University. “Such deterioration will definitely affect the general mood of the people. The aggravated economic and political situation can lead to the expansion of the protests.”

Those who took to the streets again Monday in demonstrations that saw three deaths, said economic conditions were making life increasingly difficult.

“One cannot form a new government to lead the economy and at the same time spend huge money on the logistics and other needs of the security organs and police to crack down on protests,” said Salim Nasser, a member of a self-styled resistance committee in Khartoum. “This situation will lead to total economic collapse.”

©2022 Bloomberg L.P.