Sudan aims to remove gradually all subsidies from sugar and petroleum products to increase government revenue as foreign exchange shortages hit the economy, the finance minister said on last week.

Analysts say years of overspending and oil dependency have caught up with Khartoum. Foreign investment has slowed because of the global financial crisis and a soaring import bill has caused inflation to rise and foreign exchange shortages.

On Wednesday, the parliament approved cutting one-third of the subsidies on petroleum products and raised the price of sugar as well as cutting the salaries of 149 top-level officials, all of which it said would free up some 2 billion Sudanese pounds.

But on Thursday Finance Minister Ali Mahmoud told reporters this was just the first stage.
“We will stop all subsidies gradually,” Mahmoud said. Sudan only subsidises petroleum products and sugar.

He said subsidies on petroleum products cost 6 billion Sudanese pounds a year and the sugar subsidy was creating a huge import bill, adding much of it was not consumed locally but smuggled out to neighbours where prices were higher.