Sudan’s upcoming decision on lifting subsidies draws strong objections
September 8, 2013 (KHARTOUM) – The Sudanese government is inching closer to lifting fuel subsidies for the second time since last year to plug the ever growing budget gap prompting a strong disapproval from the country’s largest opposition party and lawmakers.
He also stressed that economic reform must be coupled with political reform and denied in this regard that his party will join the government prior to the ruling National Congress Party (NCP) undertaking an overhaul of the political system.
Last week, Al-Mahdi issued the same warning during a meeting he held at his residence with the Finance minister Ali Mahmoud Abdel-rasool and the Central Bank governor Mohamed Kheir al-Zubair.
Sudan lost 75% of its oil reserves after the southern part of the country became an independent nation in July 2011 denying the north billions of dollars in revenues.
Prior to the country’s breakup, Sudan produced close to 500,000 barrels but now its output is limited to 140,000 barrels per day. Oil revenue constituted more than half of the Sudan’s revenue and 90% of its exports.
Following the independence of South Sudan in July 2011, Khartoum was forced to introduce a contractionary budget that saw the partial lifting of fuel and food subsidies which triggered rare but small demonstrations across the country.
The government defended the measures saying that the country can no longer afford to pay for these subsidies.
The NUP leader criticized the government for making the decision to lift subsidies through NCP institutions and without consultation with other political forces, saying that he advised the finance minister and the central bank governor not to implement the decision.
Al-Mahdi described the anticipated decision as using the analgesic drug “aspirin” to treat a chronic disease, saying that the true measures for economic reform involve arriving at peaceful settlements to the civil wars, reducing government expenditure, and normalizing relations with South Sudan.
The former Prime Minister recalled that the European Union (EU) has linked improving its relations with Khartoum to political reform in governance. He proposed forming a commission of the elders to promote peace between Sudan and South Sudan and stop wars in Darfur, South Kordofan, and Blue Nile states.
He also slammed the NCP and said that its refusal of the rebel groups demands in 2006 and abrogation of the Nafie/Agar agreement have raised the ceiling of rebel demands, pointing that the ruling party missed a historic opportunity to stop those wars.
He acknowledged the preferential treatment his party receives from the NCP, saying that it is because his party differentiates between opposing the government and opposing the “country” unlike other forces which do not recognize the difference.
Late last month, Al-Mahdi met with Sudan’s president and head of the NCP Omer Hassan Al-Bashir as part of the latter’s meetings to consult with the leaders of the political forces on the forthcoming cabinet reshuffle.
Al-Mahdi said in brief remarks following the meeting that he agreed with Bashir that issues of governance and constitution are national ones that should exclude no party or faction and stressed that the two parties will hold consultations in order to reach agreements which he did not specify.
The NUP leader defended his meeting with Bashir in the presence of his son, Abdel-Rahman who is also a presidential assistant and said that he informed the NUP institutions about the details of the meeting, pointing that his son attended the meeting as a representative of the government.
He said that the NUP enjoys international legitimacy more than the government, linking coordination with the opposition parties to resist the anticipated lifting of subsidies to making essential reforms within the opposition alliance.
Al-Mahdi reiterated his party’s refusal to join the government and said that they will only join a new regime which is based upon the national agenda put forward by the NUP, pointing to the continuation of the “Liberation Ticket” campaign.
Last July, the NUP announced its “Liberation Ticket” initiative to change the regime through collecting a million signatures and organizing sit-ins in public squares and other places.
The head of the NUP economic committee, Sideeg Al-Sadig Al-Mahdi, for his part, said that government spending increased by 11% during 2013, while it was supposed to decrease by 25% according to an earlier government announcement.
He stressed that the NUP refused to join the government in order not to get involved in the current economic crisis, accusing the NCP of trying to implicate the NUP and the Democratic Unionist Party (DUP) led by Mohamed Osman Al-Mirghani in the crisis.
Sideeg added that the government turned the country from the social welfare state it was during the democratic government of Al-Sadig Al-Mahdi into a “levy” state.
He warned against lifting subsidies on fuel and wheat and said that the already high inflation and poverty rates could exacerbate, demanding that the government focus on fighting corruption and decreasing spending.
Sideeg further said that the government imports 2 million tons of wheat annually at a cost of $1 billion and pointed to the global increase in wheat prices, saying that the radical solution lies in agriculture revitalization.
He warned against the huge parityin exchange rate between the Sudanese pound and the US dollar and pointed to its negative impact on government subsidies, saying that subsidies have increased from 2.2 million pounds (SDG) in 2011, to 4.2 million due to the increase in exchange rate.
The NUP official pointed that the government spent oil money in unproductive activities during the transitional era prior to South Sudan’s secession, saying that improving relations with Juba could yield Khartoum up to $4 billion in trade and oil fees which is enough to overcome the budget deficit.
He provided a subscription for solving Sudan’s economic crisis including providing urgent subsidies for agriculture and grazing activities, infrastructure rehabilitation, small government, achieving peace with South Sudan, return to the regional government with 6 regions instead of the existing 18 states.
Sideeg further called for holding a comprehensive economic conference in order to find ways for canceling external debts, adjusting oversight institutions, reducing public expenditure, increasing production and exports, warning against the negative social, political, and economic impacts of the anticipated decision to lift government subsidies.
Meanwhile, influential MPs have announced on Sunday that they will summon the finance minister to question him on the anticipated decision of lifting fuel subsidies, threatening that they would suspend the decision if the government didn’t seek the approval of the parliament.
The MPs, who preferred to stay anonymous, directed harsh criticism at the government’s economic sector and accused it of resorting to lifting subsidies on goods as the easiest way for tackling the economic crisis, blaming the government of ignoring the parliament calls for economic reform prior to South Sudan’s secession.
(ST)