Due to the ongoing COVID-19 pandemic, Sudan’s transitional government may have to continue with the failed subsidy programme, after the suspension of a planned conference in addressing the issue.
The conference was aimed at proving binding recommendations and decisions on commodity support issues, financial policies, exchange rates, banking sector conditions, aspects related to people’s pension and macroeconomic policies, as well as ways to recover looted funds from the previous regime.
Sudan is currently faced with the shortage of basic commodities such as fuel, wheat flour, cooking gas and some medicine due to lack of foreign exchange for imports, coupled with an imbalance in trade in excess of $4 billion.
Commodity subsidy is one of the most controversial programmes, which uses more than $300 million annually as a way to cushion poor people from extreme food prices. The conference was however set aside by the government to formulate a rescue plan for the people, but this will have to be on hold due to the ongoing pandemic.
According to Sudan’s Finance Minister, Mr al-Badawi the current subsidies on fuel and basic foods were unfair and ineffective as only the rich benefited. The new proposals included distributing cash to the poor to give them purchasing power and in turn eliminate the subsidy.
Due to the virus, Sudan’s economy could be greatly affected. Sudan’s exports are estimated at about $3 billion, and imports at $7 billion. The Sudanese pound also recorded a decline last week, exchanging at 124 units per dollar, contrary to the expectations of observers who predicted it would recover amid low oil prices.
More so, the virus spread could affect the Friends of Sudan conference of donors scheduled for June, which seeks to support the Sudanese economy. This could further delay the completion of new investment projects covered by the 2020 budget, especially related to external support based on donor pledges.
At a briefing to the media last week, the minister said that his ministry will provide cash support amounting to 210 million Sudanese pounds ($379,5752) for the groups that were affected by the lockdown measures that included the forceful shutdown of businesses.
As of the 29 March, six confirmed cases of COVID-19 and two deaths were reported in Sudan. All cases are imported with recent travel history no local transmission has been documented. Three patients have been admitted to Khartoum state hospital isolation and 28 suspected cases are in home isolation. Also, there are 15 people currently being monitored in quarantine at Universal Hospital.
The Sudanese government is making economic reforms that are required to re-integrate Sudan into the international economy and win support from international lenders. Sudan has been in talks with the U.S. to remove it from the list of terrorism sponsors, thereby giving way for foreign financial aid.
