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Sudan plans cash transfer to poor after removal of fuel subsidies

Sudan’s finance minister on Thursday laid out a system of money transfers to the poor in a step towards removing costly fuel subsidies to end an economic crisis.

The new civilian government is trying, with the help of donors, to launch a series of economic and political reforms after veteran ruler Omar al-Bashir was ousted in April 2019.

Sudan PM. Image credit: Reuters, MOHAMED NURELDIN ABDALLAH

Finance Minister Ibrahim Elbadawi said on state television poor people will get 500 Sudanese pounds ($9.09) a month from the second half of the year. Some 65% of the population live below the poverty line.

Retired public servants will also see their monthly pensions increased, he said. Sudan had already announced a rise in public salaries.

“The aid will start in the second half of the year with the help of donors and the Sudanese government to compensate citizens for a rationalizing of fuel and gasoline subsidies,” Elbadawi said. “It will go directly to citizens and poor families.”

Sudan is hoping for support from the international community but a donor conference planned for June has been postponed due to the coronavirus pandemic.

The government will use aid pledged by the European Union worth 460 million euros ($495 million) to fund its economic reforms.

Potential foreign donors are pressing for subsidy reforms and greater economic transparency. The removal of fuel and wheat subsidies — a burden for government finances — is a politically sensitive issue.

Image credit Reuters

Shortages of bread, fuel and medicine coupled with hefty price rises triggered the protests that led to Bashir’s toppling. Inflation is running at more than 80%, according to official statistics.

The economy remained in turmoil after Bashir’s ouster as politicians negotiated a power-sharing deal between the military and civilians.

The government was appointed in September and has taken over for three years under the power-sharing deal. It is negotiating with the United States to get Sudan removed from a list of countries deemed sponsors of terrorism.

The designation, which dates from 1993 allegations that Bashir’s Islamist government supported terrorism, makes Sudan technically ineligible for debt relief and financing from the IMF and World Bank - further jeopardizing economic development. The U.S. Congress needs to approve Sudan’s removal from the list.

Program participants stand in line to receive a cash transfer for food outside a training facility in South Sudan. Image credit USAID

Source: Reuters, Khartoum


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