Odd-Helge Fjeldstad

Research Professor, Coordinator: Tax and Public Finance

Sudan has undertaken decentralization reforms since the early 1990s, in a federal government system with three tiers: federal, state, and local government levels. Fiscal decentralization was fueled by a decade-long oil boom. With the secession of the South in July 2011, Sudan suffers from large oil revenue losses and significant economic instability. Own revenue mobilization at sub-national levels is low. Inadequate and unevenly distributed own-revenues at both state and local government levels and unpredictable levels of transfers from the federal government pose serious obstacles to implement the policy of fiscal decentralization. The purpose of this project is to assess how the current sub-national revenue system in Sudan can be better designed and managed to thereby strengthen the states’ and local governments’ own resource mobilization. The analysis focuses on the composition of sub-national revenues, administrative practices, and possible impacts of the current system on economic activities. Experiences from other African countries that have suffered similar challenges in the past are also assessed. On this basis the study provides recommendations on how to improve sub-national revenue collection without jeopardizing economic activities and private sector development. The study is conducted in close collaboration with the World Bank’s public expenditure review team and provides inputs to the report State-level Public Expenditure Review: Meeting the Challenges of Poverty Reduction and Basic Service Delivery.