‘Sudan’s tariff hikes will increase poverty’

The expected increase in electricity and water tariffs, coinciding with a new wave of price rises of basic commodities, has raised many responses. With the recently raised US dollar exchange rate for wheat imports, the bread prices may reportedly rise by some 35 percent.

Prof Hamid Eltigani, economist and head of the Department of Public Policy and Administration at the American University in Cairo, commented to Radio Dabanga that the price increases will not only affect the already impoverished Sudanese citizens but also the country’s production sector.

“The Sudanese government seems to have abandoned its basic obligations to provide drinking water, electricity, education and health services to the people,” he said.

“Khartoum is increasing prices and taxes to collect the money needed for its army, militias, and security forces. It is crystal clear that the government is only concerned about maintaining its presence, not about the fate of the population, of whom more than 50 percent are living below the poverty line.”

Eltigani warned that this poverty will “certainly increase” if the government continuous its “devastating policies”.

He further stressed that fuel is essential for the agricultural and industrial sectors. “Khartoum should in fact reduce the costs of production input to boost the economy, and levy the production outcomes instead of its inputs.”

The Sudanese economist pointed out that the government's reliance on loans will never solve Sudan’s economic crisis.

“It is just a cheap way to collect money, and does not effectively contribute to the boosting of the country’s economy. Effective economic performance needs a clear vision which Khartoum obviously lacks. All large-scale projects carried out by the government have failed,” he stressed.

“Sudan’s debts have accumulated and the government does not care about future generations. It has opted for a day-to-day economic policy that has led to this major economic collapse.”

Since 2003 the Sudanese government has borrowed about $30 billion from funds, banks, and states. The debts reached $45.6 million in 2013, constituting 83 percent ofits 2011 GDP. The trade balance deficit is about $5.4 billion.

Parliament

The Sudanese parliament’s Energy Committee stressed on Monday that no party has the right to impose additional fees on citizens without the approval of the parliament.

In a meeting of the Committee with the Minister of Water Resources, Irrigation and Electricity, Mutaz Mousa, on Monday, the Minister said that the current electricity tariff is not covering the production costs.

He proposed to set up “a dialogue” between the concerned state agencies and the citizens to find a solution for the low-income sectors and the high-consumption sectors.

Hayat Ahmed El Mahi, chairwoman of the Energy Committee, stressed in the meeting that the country’s 2015 budget does not contain new taxes affecting the people’s livelihood.

Sudan News Agency (Suna) reported on Wednesday that the parliamentarian Committee plans to do a “comprehensive review of the electricity tariffs for the coming period”, based on studies previously conducted. In case these studies are not convincing, a new research will be launched, together with a number of workshops to evaluate the situation.

Mass mobilisation

The opposition parties in Khartoum called on all Sudanese to stand up against the proposed increases in the electricity and water tariffs, as well as an expected rise in bread prices in the country.

In a statement on Wednesday, the allied opposition attributed the deterioration of the living conditions and the collapse of the Sudanese economy to the “rampant corruption, lack of production policies, dependence on oil and gold prospection, and the government’s lack of vision of economic reform after the secession of South Sudan in 2011”.

They stated that the costs of the wars, amounting to $4 billion monthly, “threaten the stability of the people’s lives and affect their daily needs of food, health, education, stability, and security”.

The statement further stressed that the wars and the impoverishment will not stop under the current regime, “which concentrates on consolidating its presence”, and that there is no solution other than “exerting all efforts to realise a regime change in Sudan”.

Bread prices

The Central Bank of Sudan has raised the US dollar exchange rate at which wheat imports are purchased, Reuters reported yesterday.

The government decision means a reduction of the subsidy. The wheat prices will rise by some 35 percent, an official at the state-owned Seen Flour Mills told Suna on Wednesday. 

The Central Bank had sent a document to concerned parties changing the rate from SDG2.9 a dollar to SDG4 for wheat imports.

"Large amounts of pounds go to subsidising wheat … but the citizen does not benefit, rather the wheat producers in the countries that we import from do," El Ageb Abdelrahim of Seen Flour Mills said.