Sudan increased flour subsidies by 40 percent, the Finance Ministry said, after the reduction of subsidies this year sent bread prices higher and triggered protests. The government would spend 35 million Sudanese pounds ($737,000) daily instead of 25 million, the statement added. A decision to reduce bread subsidies this year sparked rare nationwide protests after bread prices doubled. Inflation climbed to a record 66 percent in August, one of the highest rates globally.
Sudan’s economy has been struggling since the south seceded in 2011, taking with it three quarters of oil output and depriving Khartoum of a crucial source of foreign currency. Sudan sharply devalued its currency in October after a group of banks and money changers was tasked with setting the country’s exchange rate under a new system established by the government to tackle an acute shortage of foreign exchange. The crisis has deepened over the past year as a black market for U.S. dollars has effectively replaced the formal banking system after the Sudanese pound was devalued, making it more difficult to import essential supplies such as wheat.
Sudan imported 2 million tons of wheat in 2017, the government said in December, compared with 445,000 tons produced locally. Private sector wheat traders, who were given responsibility for imports by the government at the start of this year, blamed the flour shortages on the foreign currency shortages.