Historic salary hike sees prices soar in Sudan

Prices of commodities have soared, and transportation tariffs doubled over the last several days across Sudan. The increases are largely attributed to the recent dramatic increase in salaries in the country.

On Monday, the Central Bank of Sudan (CBoS) issued SDG 200* banknotes as prices increased ‘significantly’. The price of a gallon of petrol jumped from SDG 28 to SDG 128, while a gallon of diesel no longer cost SDG 17 but SDG 103. Transportation tariffs have doubled.

As reported by Radio Dabanga last week, banks in Sudan limited the daily withdrawal maximum of SDG 5,000 to SDG 2,000.

In April, the Ministry of Finance announced an increase in the minimum wages from SDG 425 to SDG 3,000, to be implemented in May. The salaries of civil servants would go up with an average of 569 per cent – the largest increase in the history of the civil service in the country.

'Daunting challenges'

The International Monetary Fund predicted in its country report on Sudan earlier this year that the Sudanese economy would continue its downward spiral, unless the government implements decisive financial reforms. The IMF also stated that while regime change has created a window of opportunity for fundamental reforms to address major macro imbalances and lay the groundwork for inclusive growth, the challenges facing the new government are daunting.

“The economy is shrinking, macroeconomic imbalances are large, competitiveness is weak, and the humanitarian situation is dire. Concerns about governance and corruption persist. Sudan’s listing as a state sponsor of terrorism by the United States also blocks progress toward HIPC (Heavily Indebted Poor Countries) debt relief and the clearance of large arrears to the IMF,” the report says.

Sudanese economist Ahmed Hamid warned already in March that the government’s plan to increase wages would lead to a rise in prices, which in turn would hike the inflation rates.

* USD 1 = SDG 55.1375 at the time of publishing this article. As effective foreign exchange rates can vary in Sudan, Radio Dabanga bases all SDG currency conversions on the daily middle US Dollar rate quoted by the Central Bank of Sudan (CBoS).

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