September 28, 2020 (KHARTOUM) – Sudan’s Economic Conference Monday approved a recommendation to replace commodity subsidies with direct cash transfers to vulnerable families.
The three-day economic conference concluded its meetings on Monday. It was organized by the government to discuss needed economic reforms to restructure the budget, control inflation and lay down the needed bases for development.
“Commodity subsidies represent a burden on the budget and the trade balance, also, the rural population does not benefit from it, especially subsidies to electricity and cooking gas. (These reasons) require to convert to direct cash support,” provide the recommendations of the conference read by an advisor to the prime minister for economic affairs.
The removal of subsidies would directly hit a population suffering for years from the economic crisis and high inflation. However, the measure is needed to curb the ramping inflation and reduce the budget deficit.
Since last year the transitional government vowed to cut subsidies and pledged to keep subsidies on bread and electricity.
But the Forces for Freedom and Change during the conference voiced their opposition to the removal of subsidies for basic commodities and said it is a continuation of the previous regime’s approach in dealing with international financial institutions. They called for an economic plan that mobilizes the country’s resources and control of all military companies.
The recommendation to remove commodity subsidies was met with strong opposition from the members of the Resistance Committees who were in the conference, as they chanted slogans rejecting the move and held banners reading “I do not agree”.
Outside the meeting hall, the youth continued chanting, “No to subsidies removal” and called to hold sittings and protests”.
The government said it would establish a safety net, funded by the international community, to support poor families and absorb the increase of prices.
The Sudan Partnership Conference held on 25 June pledged to fund a Family Support Programme (FSP) by the Sudanese government to vulnerable families to face the subsidies lift.
On 27 September European Union countries signed an agreement with the World Bank to allocate $110 million to a multi-donor trust fund administrated and managed by the international institution to fund the FSP.
At the occasion, France, Germany, Italy, the Netherlands, Spain and Sweden also announced their support, summing up to $78.2 million USD, bringing the total European contribution to $186.6 million.
Also, the UN Secretary-General in a report to the UN Security Council urged the international community to support the Sudanese government to implement reforms.
“It is imperative that international support is delivered as the transitional Government strives to implement its difficult economic reform agenda,” said Antonio Guterres.