(3 minutes read)
· Wild protests were noticed in Khartoum recently following a government decision to remove subsidies on petrol and diesel
· In the recently concluded Paris Summit, Sudan was very close to securing much-needed relief through the IMF-World Bank Highly Indebted Poor Countries (HIPC) initiative
· The IMF member countries pledged bridge loans to clear Khartoum’s arrears to the fund
Wild protests were noticed in Khartoum recently following a government decision to remove subsidies on petrol and diesel.
The move has brought the fuel prices in line with import costs saving the government several billions of dollars per year. These
measures were announced as a key part of a 12-month IMF programme that ends in June. The IMF will take a call on whether the country is eligible for further debt relief and financing.
In the recently concluded Paris Summit, Sudan was very close to securing much-needed relief through the IMF-World Bank Highly Indebted Poor Countries (HIPC) initiative. The IMF member countries pledged bridge loans to clear Khartoum’s arrears to the fund.
Of late, there have been various efforts by Sudan’s military-civilian coalition government to turn the economy around. The US has removed the country from the US state sponsors of terrorism list in December. This has set in motion the country’s reintegration into the global economy, despite its US $60bn in foreign debt.
The balkanization the country suffered- the oil-rich South Sudan seceding in 2011\- exacerbated its fiscal woes. As part of a 2012
peace deal to end war between the two, South Sudan pledged to pay the north US$3 bn to use its infrastructure to export crude from its oilfields. This amount still has to be fully paid. Royalties from the sector paid from South Sudan to Khartoum have been hit by the pandemic. South Sudan currently pays Sudan four fees for every barrel of oil produced – for transportation, processing, transit and non-commercial tariffs.
Sudan’s prime minister, economist Abdalla Hamdok, called for urgent reform to offset the risk of ‘chaos and civil war.’
