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Economist: ‘Sudan’s real inflation rate tops 50%’

December 27 - 2017 CAIRO / KHARTOUM

The Sudanese government’s official increase in the US Dollar price from SDG 6.6 to SDG 18 is as a step towards floating the Sudanese Pound and liberalising the US Dollar price, according to a leading expert on Sudan’s Economy.

“The real inflation rate in Sudan now exceeds 50 per cent,” says Prof Hamid Eltigani, head of the Department of Public Policy and Administration at the American University in Cairo.

In an interview with Radio Dabanga, Prof Eltigani attributed the Sudanese government’s official Dollar price to controlling the four billion US Dollars in reserves in the banks.

“The budget of 2018 as a real disaster,” he said, pointing out that “68 per cent of the revenues depend on taxes and 32 per cent on borrowing; whether from the banking sector or from countries. Oil and gold will exit the budget altogether.”

“The government has officially abandoned spending on services, especially education and health… and increased spending on security and the army.”

Prof Eltigani doubts the government’s ability to collect taxes covering 68 per cent of the budget and pointed to the steady decrease in the tax base due to the recession, the weakness of purchasing power, the high inflation rates, and the continuous increase in commodity prices.

He highlights the absence of development from the budget of 2018 as “the Sudanese government has officially abandoned spending on services, especially education and health, with emphasis on the first item of wages, government spending, and increased spending on security and the army”.

Prof Eltigani ridiculed statements by Finance Minister Dr Mohamed Osman El Rikabi that the aim of the budget is to reduce inflation rates from 34.1 percent to 19.5 percent.

He said it is impossible to lower the inflation rates while the government is continues to borrow from the banking sector by printing more currency.

He questions the official government figures for inflation rates and pointed out that the real inflation rates in Sudan exceed 50 per cent. “The new budget will lead to a continuous increase in the prices of commodities including flour and fuel. The only way out of the current situation is structural changes in the governance and the way the economy is managed.

NUP

The President of the National Umma Party (NUP), El Sadig El Mahdi, attacked the government and criticised its internal and foreign policies.

He said he expected the government to declare a State of Emergency in response to reactions to the rise of prices and economic downturn.

Speaking on the occasion of his birthday, Ell Mahdi said: “Isought a Fatwa from the Sheikh of Al Azhar in Egypt regarding eight of the government’s practices to which he responded that they have nothing to do with the Islamic approach.”

He proclaimed the 2018 budget “one of the worst throughout the rule of current regime”.

Ibrahim El Sheikh, the former President of Sudanese Congress Party, described the economic situation as “very grim” and considered that “all the vital indicators indicate that Sudan is about to collapse”.


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