Sudan to double minimum wage

Dec 31 2012 08:50
Khartoum - Sudan's cash-starved government on Sunday ordered a doubling of the minimum wage after months of rising prices left consumers struggling to make ends meet.

But an economist said the increase - which applies only to state employees - is far from enough and will be difficult to finance.

The order by President Omar al-Bashir reversed earlier official rejections of an increase despite inflation which reached 46% in November.

"President Bashir gives directive for increasing the minimum wage to 425 pounds (about $61 on the black market) as of January 1," the official SUNA news agency said in a brief dispatch.

The new figure is roughly double the old minimum but Mohammed Eljack Ahmed, a University of Khartoum economist, said it is still short of what is needed.

"This is actually equivalent to one-quarter of the real needed minimum wage under the present condition," he said.

In June and July anti-inflation protests erupted around the country, with Arab Spring-inspired calls for the overthrow of Bashir's 23-year rule. The scattered demonstrations petered out in the face of a clampdown.

Almost 47% of Sudanese lived below the poverty line in 2010, the United Nations said, but the country has descended into economic crisis since July last year when South Sudan separated with roughly 75% of the formerly united country's oil production.

Inflation has risen and the value of the Sudanese pound has dropped to record lows as the lost crude accounted for most of Khartoum's export earnings and half of its fiscal revenues.

"What are the resources to finance such (an) increase in the budget?" Ahmed asked.

"It is necessary but it is very difficult to do it," when the government has not effectively cut its own expenditures, he said.

Another economist, speaking earlier to AFP, assessed Sudan's projected budget deficit at 10 billion pounds ($1.4bn).

A September agreement between Sudan and South Sudan included a financial package worth about $3bn in southern compensation for the oilfields Sudan lost at separation.

The two sides also agreed on fees for exporting the South's oil through northern pipelines for export.

But the deal has been held up over security issues.

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