Sudanese Minister Defends 500 Percent Increase in Power Fees

Khartoum — Yesterday, Minister of Energy and Mining Kheiri Abdelrahman attributed the significant increase in power tariffs to the need to cover the deficit in finances concerning electricity provision.

The deficit now amounts to roughly 60 per cent of the budget because of the soaring annual inflation and the enormous increase in salaries of government employees last year, he explained in a press statement yesterday.

The Minister, however, emphasised that the tariffs increase has been imposed "in a balanced way" and will not affect "the simple consumer, farming areas, and the pharmaceutical industry".

He explained that roughly 70 per cent of the provided electricity is subsidised, which should cover an estimated 40 per cent of the consumers in Sudan.

"The highest class of subsidised power provision pays SDG 760* for 600 kilowatts. Those who do not consume more than 400 kilowatts pay SDG 440, and the 19 per cent of consumers who don't buy more than 200 kilowatts, pay SDG 180," he said.

The Sudanese Central Bureau of Statistics announced on December 10 that the annual inflation rose to 254.23 per cent in November last year, compared to 229.85 per cent in October.

Sudan suffers from one of the highest inflation rates in the world. Economists say it could turn into hyperinflation unless the country controls its budget deficit and money supply.

The agency stated that the monthly inflation rate increased by 24.49 per cent in November, compared to October.

Controversy

After the imposition of the increased electricity tariffs, the Economic Committee of the Forces for Freedom and Change (FFC) demanded the immediate cancellation of the 500 per cent increase.

The FFC warned that "inflated power fees will lead to an increase in the prices of many goods and services, and negatively affect agricultural and industrial production and exports". The organization added that "this large increase in the electricity fees is implemented illegally, as it is not included in the 2021 National Budget, that has not been passed yet."

The increase in power tariffs is an especially controversial topic at a time when the leaked 2021 National Budget shows that the Sudanese government plans to increase the budget for the military and security forces while the budgets for health care and education will decrease.

Dr Hasan Bashir, Professor of Economics at El Nilein University in Khartoum, told Radio Dabanga last week that he expects that many Sudanese will continue to live in dire conditions in 2021.

It is important to note that the vast majority of Sudanese, about 70 per cent, work in the informal sector and thus do not benefit from the increase in salaries or government subsidies.

* USD 1 = SDG 55 at the time of posting, according to the daily middle US Dollar rate quoted by the CBoS. Effective foreign exchange rates however can vary widely on Sudan's parallel market, where the greenback sold yesterday for SDG 264.

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