Sudan to continue the liberalisation of its economy

Sudan’s Minister of Finance and Economic Planning, Dr Jibril Ibrahim, announced yesterday that his ministry would continue to adopt liberalisation policies “until the Sudanese economy recovers from the distortions it has long suffered from”. Ibrahim admitted that citizens would initially suffer from those policies but promised that ‘ordinary people’ would benefit from economic reforms.

The minister explained that citizens will experience the painful initial effects of some policies, but that they are nevertheless the only way to “remove the distortions” in Sudan’s economy and work towards stable economic reform.

Jibril Ibrahim further explained that the subsidy policy was “one of the failed and unfair policies” in which citizens are treated unequally. The minister affirmed that ‘ordinary people’ would be the first beneficiaries of subsidy removals as this helps to direct funds towards important sectors such as health, education, and electricity or the combat of crime.

The Minister said that he was aware of the sufferings of the people and the state's disability to control the current market price hikes but stressed that these liberalisation policies allow the ministry to regain control over the market and act on behalf of the country’s real needs.

Ibrahim also apologised that his ministry and the Ministry of Trade did not manage to fully cover the “My Commodity’ programme but promised that the Ministries of Finance and Trade are endeavouring to provide commodities for people at cost price.

Bread and fuel protests

Food and other commodity prices have been on the rise in Sudan. OCHA reported last week that prices continued to rise in April. This is especially difficult for Sudan's displaced.

Earlier this year and for the second half of last year, Sudan was engulfed by a wave of protests against recent price increases in consumer goods, fuel, and subsidised bread shortages.

The protests against increased prices of essential commodities were triggered by Sudan’s economic crisis and high inflation, which caused high price increases without the financial support for civilians to adapt to these price increases.

The response of the Sudanese government to these developments was widely criticised by civilians.

Economist Prof Mohamed Sheikhoun, for example, criticised elements of the 2021 budget, including the removal of fuel subsidies, the increase in electricity fees, and the rising expenditure on security forces and government agencies.

He told Radio Dabanga in January that the government had practically abandoned the provision of commodities by removing essential subsidies on fuel and electricity.

IMF and international support

The international community has lauded Sudan’s economic reforms after its re-entry into the international economy. During the Paris Conference last month, economic reform was a big theme.

UN Secretary-General António Guterres, for example, commended the Sudanese government for undertaking the “difficult economic reforms” and French President Emmanuel Macron also called for the continuation of the “courageous economic reforms”.

Sudan is currently going through a debt relief process under the International Monetary Fund’s (IMF) Heavily-Indebted Poor Country (HIPC) Initiative.

IMF Director Kristalina Georgieva lauded the progress Sudan has made on economic reforms under the IMF Staff-Monitored Program (SMP). Georgieva explained that the debt relief programme "would help unlock significant new financial resources to address Sudan’s large development needs and poverty reduction”.

She also explained that debt relief will be delivered as long as Sudan continues its reform efforts.

Last month, the World Bank’s Vice-President for Eastern and Southern Africa, Hafez Ghanem, stressed that the international community appreciates Sudan’s efforts to improve its economy, fight poverty, and pursue all the necessary economic reforms.