Sudan to align fuel price with global rate, $400m World Bank grants
Sudan’s authorities plan to align the domestic selling price of fuel with international price levels. The Board of Executive Directors of the World Bank group approved a grant (pre-arrears clearance) of $200 million to support the efforts of the transitional government in implementing the government programme for economic reforms, in addition to $200 million from Sudan’s partners.
Energy and Mining Minister Kheiri Abdelrahman said in a statement on Monday that the fuel price will be calculated in the Sudanese Pound (SDG) equivalent of the rate in the parallel market.
The new fuel price depends on the value of the fuel globally, in addition to the logistical costs related to unloading, transportation, and distribution, the minister said.
He pointed out that the Ministry of Finance exempted taxes on fuel at the new price. “The numbers circulating in the local media about fuel prices are just guesses,” noting that the Ministry of Energy has not set any price, and that the new price decision will be taken by the Council of Ministers or the Ministry of Finance.
He explained that, since August, the Ministry of Energy embarked on implementing the government’s decision to liberalise fuel, indicating that it will be sorted by the end of October.
$400 million World Bank grant
The Board of Executive Directors of the World Bank group approved a grant (pre-arrears clearance) of $200 million to support the efforts of the transitional government in implementing the government program for economic reforms, in addition to $200 million from Sudan’s partners previously approved and which will be administered through the Sudan Transition Support Trust fund to finance the Samarat [fruits] Family Support Programme.
On Monday, Minister of Finance Heba Mohamed confirmed that the economic reforms being implemented by the transitional government, despite their difficulties at the present time, "will succeed in the medium and long term in achieving economic stability and re-moving the wheel of production to take advantage of our rich resources and address the structural distortions that the economy suffers from, and directly reflects on the public’s livelihood".
The World Bank Vice President for Eastern and Southern Africa, Hafez Ghanem, said that the World Bank’s participation will support the vision of peace in development, with a focus on macroeconomic stability, job creation and sustainable development for all Sudanese.
IMF development grants
The International Monetary Fund (IMF) endorsed a Staff-Monitored Programme (SMP) in end September, based on the government's request for assistance for its economic reform programme.
The 12-month SMP aims to support the government’s own programme of reforms in order to stabilise the economy, improve competitiveness, and strengthen governance.The implementation of the programme will make Sudan eligible for more than $ 1.5 billion annually in direct development grants to stimulate investment and revive the economy.
However, financial analyst Hafiz Ismail expects the fund programme to be accompanied by harsh economic measures that will have a major impact on the economy.
"The IMF offered the government aid amounting to $400 million, in exchange for an increase in the official exchange rate from SDG55 to SDG130. Yet, an increase of the Dollar rate exchange rate on the parallel market is expected, in light of the scarcity of hard currencies in the country," he said. "This will of course increase the inflation as well."
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