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Sudan PM: Austerity Measures Aim to Avert Total Economic Collapse

Sudan PM: Austerity Measures Aim to Avert Total Economic Collapse

Tuesday, 1 May, 2018 - 05:45
Sudan's Prime Minister Bakri Hassan Saleh in Khartoum, Sudan March 2, 2017. (Reuters)

In a rare admission, Sudan's prime minister acknowledged his country’s crisis of foreign exchange shortages and economic imbalances caused by the liberalization and privatization policy, which negatively impacted the economy.

Prime Minister Bakri Hassan Saleh on Monday said that the government's recent economic measures were necessary to avert the overall economic collapse.

Since March, Khartoum and the rest of the country have suffered a shortage of diesel fuel, gasoline and cooking oil, which led to long queues at gas stations.

“We deeply feel the suffering of our people -- we see the long lines for gasoline -- but we’re working hard to resolve the problem,” Saleh asserted.

Addressing members of the parliament, he said that Sudan had no other alternative but to press ahead with austerity measures, adopted in early 2018.

“We have no choice but to maintain the policy of economic liberalization. We must implement economic reform and restructure our economy,” he added.

The PM revealed that the oil ministry had asked for $102 million from the government, which it had failed to pay. This consequently led to the crisis.

He however predicted that the fuel crisis will be resolved within two days after the Khartoum oil refinery resumed operation.

This is the first time that an official of this level has criticized the "policy of economic liberalization" adopted by the government of President Omar al-Bashir.

Saleh said: “The policy of absolute liberalization and privatization has produced a degree of imbalance, which has had a negative impact on the efficiency of the economy at home and abroad."

The resulting imbalances affected the exchange rate of the national currency and the balance of payments, he continued.

The prime minister went on to point out that the country’s trade deficit had widened in 2017, noting that GDP had increased over the same period.

The government has taken measures including restricting withdrawals from current accounts and arresting currency traders. However, these measures led to a rise in the prices of commodities, mainly bread. It also failed to stop the deterioration of the national currency, which reached its lowest exchange rate of 45 pounds per dollar.

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