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Economic expert: Lift subsidies, normalise Dollar rate in Sudan

February 26 - 2020 CAIRO
Prof Hamid Eltigani from the American University of Cairo (Social media)
Prof Hamid Eltigani from the American University of Cairo (Social media)

To tackle the current economic crisis the Sudanese government must realise peace, lift subsidies on commodities, and normalise the Dollar exchange rate, says professor Hamid Eltigani, economist and Head of the Department of Public Policy and Administration at the American University in Cairo.

In an interview with Radio Dabanga, professor Eltigani describes the economic situation as “dangerous”. He warns against “an explosion in the country” in case the economic crisis is not dealt with. He calls for a gradual lifting of subsidies on petrol and diesel, and normalisation of the exchange rate between the Sudanese Pound and the US Dollar.

In his view, subsidising petrol is not a measure intended to help the poor. It does encourage smuggling. Reaching peace leads to a reduction of military and security spending, and the resumption of agriculture and livestock farming in large areas by people who are now displaced or refugee.

Subsidies should be directed to the poor and those with low incomes, through ration cards, he states. A real dialogue in society should take place on lifting subsidies on the one hand and government spending on education, health and food on the other hand.

'Manipulation'

According to the economist, the government should not wait for this debate to lift subsidies. He points out that the Forces for Freedom and Change (FFC) “are politically manipulating economic issues”. He attributes the current crisis to the FFC, saying the FFC has only been interested in political measures after the fall of the Al Bashir regime and not in economic issues.

Eltigani calls for an immediate cessation of printing more Sudanese Pounds. He also calls for efforts to lift the restrictions on the banking system and put an end to restrictions on travels of foreign delegations. Exploration and production of gold should be undertaken by state-owned companies, he says.

He also urges institutional reform of military institutions and integration of the Rapid Support Forces into the regular army in order to reduce spending.

Sudan needs a clear strategy to focus on production for a specific period of time, and a strategy to fight poverty within five years, he says. It is in the interest of the poor, he says, to collect taxes from those who are able to pay them.

In February 2018, professor Eltigani predicted that the Sudanese would in the near future no longer use the Dollar as a means of exchange but rather as a means to save. He said that the exchange rate at the black market would exceed SDG 100 for $1, as is the case at this moment.

Wheat

Yesterday, the cabinet raised the price of a sack of wheat from SDG 2,500 to SDG 3,000 ($55.5).

Minister of Culture and Information and government spokesman Feisal Mohamed Saleh said in a press statement that the price increase is accompanied by a state effort to encourage farmers to increase production and productivity. He said that the targeted area for wheat cultivation in Sudan this season is now 780,000 acres.

 

* USD 1 = SDG 54.03 at the time of publishing this article. As effective foreign exchange rates can vary in Sudan, Radio Dabanga bases all SDG currency conversions on the daily middle US Dollar rate quoted by the Central Bank of Sudan (CBoS).


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