December 5, 2016 (KHARTOUM) – Sudan’s ruling National Congress Party (NCP) on Monday said that the recent drastic economic measures have helped reducing the budget deficit from 5 to 1 per cent of the total national income.
- A vendor sells vegetables during Ramadan at a local market in north Khartoum August 3, 2012 (REUTERS/Mohamed Nureldin Abdallah)
In November, Sudanese government lifted fuel subsidies and increased electricity price in a bid to control a surge in inflation and stop the fall of Sudanese pound in the black market.
The head of economic committee at the ruling NCP, Mohamed Al-Zubair, pointed that the austerity measures aimed at reducing the budget deficit.
“The new economic measures have channelled subsides for the benefit of production rather than consumption,” pointed al-Zubair, saying that these measures did not create scarcity in basic commodities.
The NCP leading figure pointed that sugar, fuel, and gas are no longer subsidized , while the government still partially subsidies diesel and wheat.
In November, government increased the price of I petrol liter from 4.6 to 6.17 SDG and 1 diesel liter from 3.11 to 4.11 SDG.
In November, the Central Bank of Sudan (CBoS) introduced an incentive policy and increased the exchange rate by 131%. As a result, the official U.S. dollar price went up in banks to 15.8 SDG in comparison with to the former official rate of 6.5 SDG.
Al-Zubair told the official Sudan News Agency (SUNA) that Sudanese pound deteriorating exchange rate is attributed to decline in oil and gold exports that decreased by 20 per cent, non-implementation of economic agreements with South Sudan and the U.S. sanctions on Sudan.
“The new economic measures will have positive economic impacts as they were part of the National Dialogue recommendations,” pointed Al-Zubair, saying that government has allocated 4 billion SDGs to absorb the impacts of the austerity measures by increasing wages and providing health insurance for 700,000 families.
Al-Zubair went to say that the new economic measures will help attracting Sudanese expatriates’ savings estimated at $ 4.5 billion, increasing gold exports to $ 4 billion and other exports to $ 2 billion.
Before the increase of the official dollar rate, Gold traders reportedly smuggled their production to the markets in the neighbouring countries where they can sell their with high rates instead of the 6.5 SDGs.
Sudan has been under American economic and trade sanctions since 1997 for its alleged connection to terror networks and remains on the U.S. list of state sponsors of terror.