Sudan Public – New Policies Fail to Address ‘Disastrous’ Economic Situation

Khartoum / Omdurman — Traders, vendors, consumers, and economists in Khartoum denounced the doubling of customs duties on more than 100 import commodities and the Ministry of Finance’s intention to lift subsidies on gas, warning of dire consequences. The amendments to several laws by the Ministry of Finance aim to give the military institution more power over the economy, a lawyer told Radio Dabanga.

Various people from Omdurman told Radio Dabanga that “the unjustified increase” in customs duties from 15 to 30 per cent “will worsen livelihoods even more.”

A merchant at the Omdurman Market said that they all are affected by the increases, which he said would lead to more economic stagnation. “The month of Ramadan is approaching and people need to buy extra commodities to prepare for the fasting month,” he said.

Ibrahim Abdallah said that lifting gas subsidies will increase people’s suffering. The increase in customs will affect prices and lead to further weakening of purchasing power, said the Mansoura neighbourhood grocery owner.

Shopper Fatima Adam called on Sudanese politicians “to abandon their conflicts over seats and deal with the disastrous economic situation.”

Amal El Sayed, a housewife, complained that she is forced to sell homemade ice cream on the street to supplement their household expenses.

Amna, another housewife, also complained about the deterioration of the economic situation with the advent of the month of Ramadan. “The increase in customs duties on imported goods will definitely increase our suffering and lead to hunger, as many people hardly eat enough anymore.”

People in Darfur also rejected the recent “unfair decisions” taken by the Ministry of Finance. El Tijani Yousef, head of the West Darfur Chamber of Commerce, said that the 100 per cent increase in customs duties already led to a significant rise in prices.

“The country has been in a state of general stagnation for months. Many exports and imports have already stopped.” He called on politicians to give priority to the “common interest” and end the current political, economic, and security crises by reaching a consensus.

Economic consequences

The decision to increase customs duties has been described by many economists as “adding fuel to the fire” of Sudan’s economic malaise. Economist Haisam Fathi confirmed that the increase will increase poverty rates in the country, especially since the poverty rate already exceeds 65 per cent.

He told Radio Dabanga that “the decision of the Finance Ministry is bad and ill-considered” and explained that “the government wants to use the levies to finance the budget. The 2023 national budget depends on customs fees and an increase in service fees.”

He called on the authorities “to limit the spread of financial and administrative corruption, along with unemployment, instead of exhausting people through levies.”

The economist explained that “the problem of the Sudanese economy is represented in the lack of volume of exports and dependence on imports, which led to the scarcity of foreign currencies and rise of the exchange rate.”

He said that “the government’s random behaviour has led to an imbalance in the general budget and an increase in the deficit. They should focus on investment, production, and export. The volume of imports should be reduced and localising production in Sudan should be prioritised, as “the country lacks policies protecting domestic industries,” said Fathi.

“Recession and reduced household purchasing power are major concerns in the aftermath of the coup, and will likely drive Sudan’s economic growth rate into negative territory,” according to a report by the Sudan Transparency and Policy Tracker published on February 20. The widening trade deficit is “mainly due to a nearly fivefold increase in petroleum imports.”

Military control

As for the various amendments to laws by the Ministry of Finance earlier this month, lawyer Samir Sheikh Idris told Radio Dabanga that “the new authority over public money aims to give the military control over large parts of the Sudanese economy. In this way, the security and military companies are able to escape accountability.”

He wondered about “the purpose of making law amendments related to economic aspects at a time when a final agreement on power and wealth sharing and legal reforms between the military junta and the civilian opposition is to be expected soon.”

Idris said that the amendments “were engineered according to the will of the coup d’état authorities to shape the future.” He explained that “the subordination of the General Audit Bureau to the Finance Ministry aims to evade economic accountability for companies related to the military and security apparatus.”

The lawyer did not rule out that the amendments were done to satisfy international financial institutions such as the International Monetary Fund to accelerate debt relief. The number of people in need of humanitarian assistance in Sudan will rise to 15.8 million in 2023, equivalent to about a third of the population, which represents an increase of 1.5 million over 2022, according to the United Nations Office for the Coordination of Humanitarian Aid (OCHA) in Sudan.