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Sudan to lift fuel subsidies gradually in 2020

December 28, 2019 at 9:45 am

Former Prime minister of Sudan Abdalla Hamdok in Khartoum, Sudan on 5 September 2019 [Mahmoud Hjaj/Anadolu Agency]

Sudan’s transitional government plans to remove fuel subsidies gradually in 2020 and double public sector salaries to ease the impact of galloping inflation, the finance minister said on Friday, Reuters reports.

The new civilian government is trying, with the help of donors, to launch a series of economic and political reforms after veteran ruler Omar al-Bashir was ousted in April.

Sudan has been in crisis since losing two-thirds of oil production with the secession of South Sudan in 2011.

Finance Minister Ibrahim Elbadawi did not say how the budget for next year would be funded or what the government forecast was for revenue and expenditure.

He told reporters subsidies for petrol and gasoline would be gradually lifted next year while subsidies for wheat and cooking gas would be kept in place to help the poor. Subsidies are a major burden for on government finances.

To alleviate the impact of inflation and poverty, the government wants to double civil service pay and raise the minimum wage to 1,000 Sudanese pounds ($22), up from 425 pounds, he said.

In October, the official rate of inflation was 58%, but anecdotal accounts suggest prices are rising more quickly.

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Shortages of bread, fuel and medicine coupled with hefty price rises triggered the protests that led to Bashir’s toppling.

The economy has remained in turmoil since then as politicians negotiated a power-sharing deal between the military and civilians.

The government was appointed in September and has taken over for three years under the power-sharing deal.

It is negotiating with the United States to get Sudan removed from a list of countries deemed sponsors of terrorism.

The designation, which dates from allegations in 1993 that Bashir’s Islamist government supported terrorism, makes it technically ineligible for debt relief and financing from the IMF and World Bank – further jeopardising economic development. The U.S. Congress needs to approve the removal.

Elbadawi did not say what Sudan expected in terms of any donor support. In November he had told Reuters the country needed up to $5 billion for 2020.

He said the 2020 budget would increase spending for education and social spending, and there would be also aid for needy families and that provinces hit by fighting and insurgencies would be allocated an extra 9.3 billion pounds.

Information Minister Faisal Saleh said the budget would be finalised in two days’ time at a meeting between the transitional government and the sovereign council, the top transitional body made up of military and civilians.