Sudanese Finance Minister Jibril Ibrahim said that his country is working on enacting measures to permanently get rid of the customs dollar, and this comes at a time when Sudan announced yesterday, Wednesday, the complete liberation of fuel prices (gasoline and diesel).
Ibrahim said, in a press conference held on Wednesday evening, that the customs dollar is “a heresy in the Sudanese economy and a legacy from the previous regime,” and pointed out that there are studies that the government is working on to unify the exchange rate in all outlets. Read also On the anniversary of the Sudanese revolution, why did the economic situation deteriorate further? Sudan is preparing for an investment conference in Paris with vital projects…Are there any promising prospects? The International Monetary Fund approves a financing plan to ease Sudan’s debt burden Hamdok: We will get Sudan to forgive 45 billion dollars of debts at the end of June
He added that the government is committed to abolishing the so-called customs exchange rate used to set import duties, and is studying the levels of customs duties to ensure that consumer prices are not affected.
The minister made it clear that Sudan will not lift subsidies on wheat, cooking gas or fuel oil that are used in the production of electricity this year, a day after the complete lifting of subsidies for gasoline and diesel.
Ibrahim cut off the government’s final exit from subsidies for gasoline and diesel and directing the subsidy funds to the interest of services and production.
Last March, the transitional government announced an increase in the customs dollar from 15 pounds to 20 pounds, by 33%, and in early April, the customs authority applied another increase in the value of the customs dollar by 40%, to 28 pounds instead of 20.
The customs dollar is for customs duties on goods imported from abroad, as the country imposes the price of the fee at this value so that the prices of goods for the final consumer are not affected.
Ibrahim also said he is considering broad reforms to the banking system.
The removal of subsidies
For his part, the Minister of Energy and Oil, Jaden Ali Obeid, revealed that the annual cost of importing fuel amounts to $3 billion, of which the government bears $1.5 billion annually. He believed that liberating fuel subsidies will provide the product and will contribute significantly to stopping fuel smuggling to neighboring countries.
In October 2020, the government announced the implementation of a gradual lifting of fuel subsidies, as part of economic reforms it intends to implement, and last February the Sudanese government decided to partially float the local currency, in an attempt to eliminate economic and monetary imbalances.
Sudan’s oil production declined after the secession of South Sudan in 2011, from 450 thousand barrels per day to 60 thousand barrels, prompting that country to import more than 60% of its oil needs.
Sudan suffers from renewed crises in bread, flour, fuel and cooking gas, as well as a continuous deterioration in its national currency.
Sudan produced 400,000 tons of wheat last season, which was disappointing. This represents a quarter of the country’s needs of 1.6 million tons.
Sudan is implementing a set of reforms monitored by the International Monetary Fund, including devaluing the currency, in the hope of getting out of a prolonged economic crisis and attracting foreign funding.