Economist: Sudan factories will go bust if tariff increases go ahead

Sudanese pounds (File photo: AMB / RD)

KHARTOUM-


The recent decision by Sudan’s Ministry of Energy and Oil to increase customs tariffs on imported goods by up to 20 per cent, has been described by economists as “adding fuel to the fire” of Sudan’s economic malaise. They also denounce the various amendments recently made to a number of laws violate the independence of the Public Audit Bureau.

Economist Osman Kheiry told Radio Dabanga that the increase in customs tariffs* will lead to a significant rise in the prices of consumer goods and will cause an increase in the costs of production inputs, which will lead to the disruption of a large number of already ailing factories.

“Previous policies led to the disruption of a huge number of production factories, and with these new decisions, the rest of them may go bankrupt,” he said.

“The government is experiencing a real crisis and has not provided any solutions except by increasing the burdens on the ordinary Sudanese. There is absolutely no hope for economic reform.”

He explained that the new decisions will lead to an increase in smuggling and customs evasion, rampant corruption, and high inflation rates.

“The people will resort to increasing their poor incomes by trading in prohibited goods. The grey economy will even expand more, which will lead to more corruption and the complete collapse of the economy,” Kheiry stated. “What is happening now are internal fights for a balance of power only and has nothing to do with the economic situation. “The Sudanese state has become inconsiderate of its citizens.”

Amendments

Economist Mohamed Khattab commented on the various amendments recently made to a number of laws violate the independence of the Public Audit Bureau.

“The Audit Bureau is an independent body and a Parliament is responsible for determining the salaries of its employees,” he told Radio Dabanga.

He explained that the appointment of directors of public sector companies contradicts the Companies Law of 2015. “This right belongs to the Legislative Council and not to the Minister or the Council of Ministers.”

He referred to the acting Minister of Justice, who criticised the law amendments as they violate the independence of the aforementioned agencies and contradict the Ministry of Justice that regulates the issuance of laws.

In a statement on Monday, the Minister of Justice said that the addition of new stipulations and bills by the Finance Ministry to a number of laws, such as the laws of the judiciary, the Sudan Armed Forces, the Rapid Support Forces, the intelligence apparatus, the police, the Public Audit Bureau, the organisation of the Ministry of Justice and the Public Prosecution Law in the beginning of this month, contradict the Constitutional Document represented in the separation of legislative, judicial and executive powers, and the correct legislative procedures were not followed.

Legitimacy questioned

Legal expert Abdelrahim El Nasri says that the various amendments to the laws that were recently approved lack legitimacy according to the 2019 Constitutional Document, indicating that they are not permissible in the absence of a civilian Council of Ministers.

El Nasri told Radio Dabanga that the amendments aim to adapt the law in order to consecrate power in the hands of the Minister of Finance. “The amendments make his powers exceed those of the Attorney General, the Minister of Justice, and the Chief Justice, pointing to the state’s lack of compliance with the law in the field of customs and taxes.

“The Ministry of Finance’s mandate over public money is important, but it should be applied in accordance with sound methods,” he said, and noted that the amendments contradict laws such as the Companies Law.

He called for the liquidation of companies that belong to the armed forces, instead of converting them into public companies by the state appointing the boards of directors. “This means a return to state dominance over the private sector.”


* On February 5, the Ministry of Finance and Economic Planning announced the arrangements for implementing the budget for the fiscal year 2023 regarding collecting national revenues and government spending.

According to the official Sudan News Agency (SUNA),fFollowing a lengthy meeting with the directors of public departments in the Ministry of Finance and Economic Planning, Abdallah Ibrahim, Undersecretary of the Finance Ministry stated in a press conference that the new arrangements include the collection of national revenues according to the categories of taxes and fees prescribed in the 2023 national budget 2023. The arrangements also include the payment of pension, and social and health insurance obligations, and the implementation of the budget for the purchase of goods and services approved by the state’s general budget.

The Undersecretary explained that the arrangements further include setting the budgets of public institutions and government companies and following up on their performance, “which ensures control over the general budget”, and “a follow-up on structural, institutional, financial and legal reform in public bodies and government companies”.