Khartoum has silently lifted its subsidies on basic commodities during the past few years, says Dr Feisal Hassan Awad, Professor of Economy at a number of Sudanese universities.
“When you compare the global fuel prices with those in Sudan, any one understands that the subsidies have already been abolished,” he told Radio Dabanga.
“After the global fuel prices dropped significantly, we assumed that the prices of fuel in Sudan would drop too, but this did not happen. Its becoming more and more clear that the state is trading in basic goods, including fuel.”
The economist said that the government is “living on taxes and fees” as a result of the “complete stop of the production wheel. In reality, the state will not lift subsidies as proposed in next year's budget, but it will increase again the taxes on basic goods, to cover its military expenses and those of the security apparatus, the public administration, as well as its own projects.”
On Monday, the Sudanese Minister of Finance requested the Parliament to endorse the government’s plan to introduce new cuts to subsidies on basic goods and services in the budget for 2016.
Minister Badreldin Mahmoud said in remarks before the federal Parliament that during the past year the amount of SDG10.5 billion ($1.7 billion) was allocated to subsidies.
He said that the subsidy cuts on wheat, electricity, and fuel will enable the government to direct funds to other productive sectors, in order to bring the country out of the current “economic bottleneck” and “distress” currently experienced by the Sudanese people.
The prices of basic goods imported from abroad are expected to rise again as the black market rate of the US Dollar recently witnessed a new low of SDG11.5.
In general, the price rises during the past years are attributed to the secession of South Sudan in July 2011, after which Sudan lost two-thirds of its oil revenues, an important source of hard currency. However, the Central Bank of Sudan announced in in September 2010 already that the lack of hard currency was becoming acute.
Soaring prices, reportedly as a result of the cutting of the main fuel subsidies late September 2013, triggered nationwide protests. The authorities responded with violent measures. Hundreds of demonstrators were killed and wounded.
The Sudanese government reportedly spends more than 60 percent on the army and the security apparatus annually, while about one percent of its annual budget is allocated to the education and health sectors.
‘Conflict, sanctions, press Sudanese currency rates’: economist (17 August 2015)
Major Sudanese miller halts production (2 August 2015)
‘Sudan’s tariff hikes will increase poverty’ (30 July 2015)
Sudanese economists warn for rise of commodity prices (19 May 2015)
Cooking gas and bread crises widen in Sudan (28 April 2015)
‘Sharp drop in Sudanese remittances’: economist (26 February 2015)
‘IMF figures on Sudan inadequate; economy imploding’: analyst (28 September 2014)
Prof: 'Cost of Darfur war estimated at $50 billion' (24 September 2014)
US lobby to hit Sudan government financially (12 June 2014)