Sudan's President Bashir dissolves government

[KHARTOUM] President Omar al Bashir dissolved the Sudanese government on Sunday, a move aimed at fixing a crisis-hit economy battered in recent months by shortages of bread, fuel and hard currency.

The announcement included a cut in the number of ministries to 21 from 31, a presidential statement said late on Sunday, without announcing any new government appointments.

The move came just after Mr Bashir called an emergency meeting of ruling party officials in the presidential palace.

The government has been trying to slash expenditure as it grapples with record high inflation, the hard currency shortage and growing concern over low levels of liquidity at commercial banks.

Long queues outside commercial banks have become a fixture around Khartoum in recent weeks as the liquidity of the local currency has dwindled and ATMs have been emptied of cash. Withdrawal limits in some places have been set as low as 500 Sudanese pounds (S$38.40).

The statement said the measures were necessary to solve "the state of distress and frustration faced by the country during the last period".

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.

The lifting of 20-year-old US trade sanctions last year was expected to usher in a more prosperous era for a country that had long been isolated.

But economic woes have only deepened as a black market for US dollars has in effect replaced the formal banking system, making it more difficult and expensive to import essential supplies such as wheat.

The dollar has risen to about 47 pounds on the black market in recent months, against an official rate of about 30 pounds. This helped to push annual inflation to around 64 per cent in July.

A doubling of the price of bread in January, after the government eliminated subsidies, triggered demonstrations.

Sudan has been without a central bank governor since June, when Hazem Abdelqader died after suffering a heart attack while on a trip to Turkey.

REUTERS