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FFC economic body rejects Sudan budget amendment

July 24, 2020 - The Economic Committee of the ruling alliance Forces for Freedom and Change Forces (FFC) announced its strong rejection of the government’s decision to amend the budget after pointing to its harsh effects on the Sudanese people.

Economy Minister Heba Mohamed Ali The Sudanese government on Wednesday announced the amendment to the 2020 budget in response to the negative impact of the COVID-19 pandemic. Accordingly, the government decided to adjust the official foreign exchange rate gradual removal of fuel subsidies.

The acting Minister of Finance, Heba Mohamed Ali, revealed the decline of public revenues by 40% as a direct result of the pandemic.

Ali said that the "very large" deficit imposed a review of the budget and implementing emergency measures, including the gradual adjustment of exchange rates over a period of two years to reach the real price.

The FFC Economic Committee, in response, said on Thursday night that the new measures taken by the cabinet ignore the demands of the June 30 demonstrations and continue to follow the path of implementing the policies of the International Monetary Fund that destroyed the national economy and impoverished the masses.

"The measures made during the last period, such as the commercial fuel, the increase in the official dollar price, and the increase in salaries from 131 billion to 226 billion without real resources are contrary to the budget law."

The committee said this programme is similar to that one approved by al-Bashir’s former Finance Minister and led to the collapse of the national currency exchange rate against the dollar from 80 to 150 Sudanese pounds, and raised the inflation rate to more than 130%.

"The FFC Economic Committee has already rejected these measures and presented an alternative national program based on the mobilization of resources inherent in the national economy."

Lack of coordination

For his part, the FFC committee member and member of the Communist Party, Sidqi Kabbalo said that the government does not consult them on its economic policies.

"We were not consulted in the budget amendment. The acting finance minister met us on the same day that the amendment was announced, but she did not inform us about it."

"We expected that there will be discussions about adjusting the budget, but still it bears the same previous features since its approval last December 2019. So it aims to increase fuel price and liberalize the exchange rate," Kabbalo said.

He stated that the acting Minister of Finance promised to discuss the amendment with the Committee and the Bank of Sudan, but this did not happen and the Prime Minister announced the adjustment of the exchange rate in October.

Regarding reports about understandings the committee reached with the Minister of Finance, Kabbalo said, "We started a dialogue but there are no understandings. Since December 2019, the Finance Minister has not met with the FFC Economic Committee."

The former minister al-Badawi "was taking his decisions alone, but we were glad that the new minister had started discussions with us, but she did not complete it."

Parasitic capitalists

The prominent economist stressed that the current economic policy enriches a group of parasitic capitalists who were benefiting from the former regime. He underscored that authorizing them to directly export gold and other commodities means actually allowing them to control the exchange rate.

He said out that the income of the gold export revenue does not enter the Central Bank of Sudan, but deposited in commercial banks. In addition, they are allowed to sell the hard currency to importers according to market price without any intervention from the government.

He went further to consider this step as floatation of the Sudanese pound.
Until January 2020, now Sudan’s central bank had been the sole body legally allowed to buy and export gold. Since the government has allowed private traders to export gold directly to stop the increasing smuggling of gold.