By Andrea Shalal
WASHINGTON (Reuters) - Sudan's top financial official believes it is "just a question of time" before his country is removed from the U.S. state-sponsored terrorism list.
Finance Minister Ibrahim Elbadawi on Tuesday told an event hosted by the Atlantic Council think tank the listing posed a "crippling impediment" to the transitional government's ability to access funds from the International Monetary Fund or the World Bank.
But he said the government was working to address security concerns, while taking steps to boost internal revenues by closing tax loopholes and unwinding a big shadow economy.
Elbadawi told Reuters after the event he was "absolutely" encouraged by his discussions with U.S. officials and lawmakers about getting Sudan removed from the terrorism list.
"I could feel that things are moving," he said. "I could not give a specific date, but I'm quite confident that it's just a question of time."
Donald Booth, U.S. envoy to Sudan, gave no timetable, adding: "We want to make sure that what we see as a problem isn't continuing, and it depends on how long it takes for them to do that."
Shortages of bread, fuel and medicine coupled with hefty price rises sparked protests that led to the toppling of Sudan's longtime ruler, Omar al-Bashir, in April, sending the economy into turmoil. The new government took office six weeks ago.
ECONOMIC REFORM KEY
Elbadawi mapped out plans to restructure Sudan's budget and tackle inflation, but leave bread and petrol subsidies in place until at least June 2020. He said the goal was to replace those subsidies - which largely benefit residents in Khartoum - with direct cash transfers to those most in need.
To smooth the transition, the government was also working to strengthen public transit in the city.
Julian Reilly, UK envoy for the Horn of Africa and the Red Sea, said it was imperative the government strike the right balance as it began to enact potentially difficult reforms.
"They have to address the historical challenges and they have to deliver the macroeconomic reforms and they cannot do that without ensuring that the necessary social safety net is in place so that the most vulnerable are protected from the potential shocks of that shift," he told Reuters.
Elbadawi said the government would also ask the 5-million-strong Sudanese diaspora to make deposits and shore up the central bank's reserves - an effort he said could generate $500 million. In the future, it could issue special diaspora investment bonds.
The U.S. State Department on Monday chaired the fourth meeting of the "Friends of Sudan" group, which includes Egypt, France, Germany, Saudi Arabia, Norway, Qatar, the United Arab Emirates, Britain, the African Union, the European Union, the United Nations, the African Development Bank, the IMF and World Bank.
The group said it was backing the transitional government's plans and could hold a donors' conference in spring 2020.
Elbadawi said Sudan's debt was around $62 billion, but the new government had asked the World Bank and African Development Bank to help reach a more precise assessment.
He said the country had about $3 billion in arrears with international financial institutions.
Reilly said Britain was committed to supporting Sudan on the pathway to arrears clearance and debt relief. "We are looking to Sudan to deliver the tough transitions that they have to do so that we can support them mutually," he said.
Elbadawi said China had been and would remain an important creditor, but Sudan was keen to "broaden the base of our partnership, notably with the United States."
(Reporting by Andrea Shalal; Editing by Peter Cooney and Andrea Ricci)