Developments in State Budgets Sample Clauses

Developments in State Budgets. The structure of government expenditures has changed markedly in Sudan since 1995. Prior to that year, the share of federal expenditures in total outlays was increasing at the expense of the share of the states. As Table 1 below shows, the implementation of fiscal federalism has led to an increase in the share of regional government expenditures in GDP from a meager 0.3 percent in 1995 to 1.9 percent in 2001, and it is expected to reach 2.7 percent of GDP in 2002. At the same time, the share of the federal government in GDP doubled during this period. Correspondingly, the ratio of state expenditures in central government expenditures steadily increased during this period, in particular in 2002. Like in many other African countries, revenue and expenditure assignments in Sudan have given rise to a vertical imbalance within intergovernmental finances. Share of capital spending in total expenditures varies greatly among states. While Khartoum allowed in 1999 around 45 percent of its total expenditures for capital outlays, only few states spent more than 10 percent. Large differences also exist in revenue-raising capacities among states, and concentration in state revenue collections has increased significantly recently. While Khartoum accounted for almost 40 percent of total revenue collection by states in 1996, its share increased to 50 percent in 1999, and is estimated to have increased further by 2001 (Table 2). To eliminate partly the resulting horizontal imbalance among states, the share of transfers to the three poorest states (Northern Kordofan, West Kordofan and Blue Nile) in total transfers increased from 8 percent to 20 percent, while share of Khartoum decreased from 21 percent to 5 percent between 1996 and 1999.