Sudanese Prime Minister, Abdalla Hamdok, has revealed the country’s economic and political reforms.
While unveiling the reforms on Thursday July 23, 2020, said the reform is aimed at rescuing the country’s economy and keeping its civilian transition on track after the ouster of Omar al-Bashir last year.
Hamdok said, “Sudan would start a currency adjustment plan and lift subsidies on diesel and gasoline, following amendments to the 2020 budget in order to mitigate the impact of the coronavirus pandemic.”
The Acting Finance Minister, Hina Mohamed Ali who was in support of the initiative said, “The pandemic has hit the economy hard, causing a loss of 40% of public revenues.”
A government source said the currency adjustment programme would begin in August aiming to reach a full float in two years.
“The amended budget would be approved in the coming days.” the source added.
Ali said the private sector would be allowed to import fuel in unlimited quantities through a newly created trade finance fund, which Hamdok said has a “portfolio of $1 billion for imports.”
Hamdok said that while subsidies on diesel and gasoline will be lifted, the government would continue to bear the brunt of the cost of flour, medicine and cooking gas.
“Subsidized fuel can still be sold to sectors like Agriculture.” Ali said.
The removal of costly subsidies is often a key requirement of donors such as the International Monetary Fund, which signed a staff-level agreement on policies and reforms that can underpin a staff-monitored program subject to board’s approval.
Foreign donor nations in June pledged $1.8 billion to help Sudan. Ali said $484.7 million of that money has been set aside for a cash transfer programme to support poor families as the subsidies are being phased out.