September 14, 2013 (KHARTOUM) – The Sudanese finance and national economy minister Ali Mahmood Abdel-Rasool has asserted that any decision on fuel subsidies will not require the blessings of the national assembly despite some lawmakers’ statements to the contrary.
- Sudan’s Finance Minister Ali Mahmoud Abdel-Rasool (REUTERS/ Mohamed Nureldin Abdallah)
Abdel-Rasool said that since such a decision does not contain any legislative measures, parliamentary approval will not be needed.
According to local press reports published in Khartoum, the Sudanese cabinet is to hold an extraordinary session on Sunday during which it intends to formally endorse a new package of economic measures which will incorporate removal of certain subsidies particularly on fuel and tax hikes of unspecified nature.
The ruling National Congress Party (NCP) leadership council chaired by president Omer Hassan al-Bashir has already agreed to the package in a meeting held this week.
The highly anticipated move has been swiftly decried by major opposition parties and even from figures within the ruling party who emphasise that the new measures will dramatically worsen the livelihood of ordinary Sudanese who are already labouring under extraordinary increases in the cost of living.
Sudanese officials namely Abdel-Rasool and Bashir’s assistant Abdel-Rahman al-Mahdi and Central Bank Governor Mohamed Kheir al-Zubeir have held meetings with opposition leaders including National Umma Party chief al-Sadiq al-Mahdi and head of the Popular Congress Party (PCP) Hassan al-Turabi to brief them on the government’s motives for the upcoming economic measures.
However, none of the opposition parties concurred with the justifications spelled out by the officials on the need to lift subsidies.
The Sudanese Communist Party (SCP) announced in a press statement on Friday its rejection of the NCP’s decision on subsidies and cancelled its scheduled meeting with al-Mahdi and Abdel-Rasool.
But the government delegation still managed to secure a meeting with the SCP leading figure Sideeg Youssef at his residence on Friday night and told him that the NCP’s leadership bureau decision does not represent the position of the government yet and that it is not official until the cabinet approves it.
Abdel-Rasool, stressed in statements following his meeting with the Youssef that the economic measures do not include legislative issues and noted that the cabinet will take up the issue in due course for a decision in this regard adding that the SCP is free to accept or reject those measures.
Youssef on his end said he received the government’s vision from the delegation and that the SCP will discuss it and submit a reply.
In the same context, the NUP accused unnamed circles of trying to associate it with the government’s subsidies decision, stressing that the party rejects this measure which would exacerbate the suffering of the Sudanese people.
Mariam Al-Sadig Al-Mahdi, a leading NUP figure, warned the government against moving forward with implementation of the decision to lift fuel subsidies and urged the government to seek other options or abandon power.
“We categorically reject the decision to lifting fuel subsidies and the NUP hasn’t agreed to the government economic measures”, she said in a SMS message broadcast to journalists.
The NUP deputy chairman, Fadl-Allah Burma Nassir, said in press statements that the NUP had informed the government of its refusal to increasing fuel prices, and pointed to the availability of other alternatives, accusing unnamed parties of trying to implicate the NUP in the decision.
The Sudanese Consumer Protection Society (SCPS) also echoed the same position and demanded that the finance ministry, cabinet and the parliament work to prevent it.
The SCPS called in a statement on Saturday for rejecting the measures and adhering to the right for a decent life, pointing that increasing minimum wage as government has pledged would not help solve the problem because wages are extremely low.
Last week the head of Sudan workers union, Ibrahim Ghandour, said that the minimum wage increase will range between 11% to 55% depending on the wage structure.
But many observers dismiss the planned hike in wages saying it will be too small to make a dent in the costs of living for most Sudanese households.
Sudanese officials argued that the current fiscal situation has reached a danger zone and unless subsidies are lifted the country could soon plunge into bankruptcy.
This week, the investment minister Mustafa Osman Ismail defended the government’s decision saying that if the NCP was looking for political expediency they would not have resorted to this measure ahead of the 2015 elections.
"We know that the decision will have political repercussions but we have decided to move forward because backing off will result in economic consequences that are more dangerous than political ones," Ismail was quoted as saying by Sudan news agency (SUNA).
"If we wanted to handle this politically we would because elections are coming….We can reach an understanding with the street about the decision which we were studying for two years," Ismail added.
The World Bank and the International Monetary Fund (IMF) have urged Sudan to free up its budget by lifting subsidies and instead focus on expanding the social safety net.
Sudan lost three-quarters of its oil production when South Sudan became independent in July 2011, worsening an already existing economic crisis as oil was the government’s main source of revenue, providing the hard currency needed to import food and other basic items.
Last year, the government launched a package of tough austerity measures, including scaling back fuel and sugar subsidies sparking rare but short-lived protests.
Khartoum also moved to effectively devalue the currency which came under enormous pressures as a result of a big shortage in Forex inflows. The Sudanese pound has lost more than half of its value since the country’s breakup which is blamed for putting inflation at double digits for several years.
Sudan is also laboring under a level of external debt that have well surpassed $40 billion.
The World Economic Outlook released last April by the International Monetary Fund (IMF) showed Sudan’s economy shrinking by -4.4% in 2012.
In 2013, Sudan is expected to achieve a 1.2% growth which is higher than the -0.6% projected by the IMF last year. Next year’s GDP is also forecasted to stand at 2.6% which is slightly better than the 2.1% predicted in the IMF last assessment of Sudan’s economy.