Sudan to lift fuel subsidies, double public sector wages in 2020

These economic reforms are designed to ease the pain of Sudan’s soaring inflation, which topped 58 percent in October.

Sudan''s Finance Minister Ibrahim Elbadawi speaks during an interview with Reuters in Khartoum, Sudan November 7, 2019
Sudan's finance minister Ibrahim Elbadawi has not yet stated how the country's budget for 2020 would be funded or what the government forecast was for revenue and expenditures [File: Mohamed Nureldin Abdallah/Reuters]

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

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 deposed in April.

Since the secession of South Sudan in 2011, Sudan has been in crisis, losing two-thirds of its oil production.

Finance Minister Ibrahim Elbadawi did not say how the 2020 budget would be funded or what the government is forecasting for revenue and expenditure.

Elbadawi 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 on the government’s 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 ($9.40), he said.

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

Shortages of bread, fuel, and medicine coupled with hefty price rises triggered the protests that led to al-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 the US deems sponsors of terrorism.

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

Elbadawi did not say what Sudan expected in terms of any donor support. In November, he told Reuters News Agency the country needed up to five billion dollars 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 ($206m)

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.

Source: Reuters