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Sudan’s economy: ‘from bad to worse’

Mubarak Ardol
Sudan’s reforms, aimed at reviving the country’s economy, led to the eruption of protests across the country and are unlikely to address the long-term economic distress.
2.10.2013  |  Kampala
A burning building in Khartoum, September 26, following violent protests in Sudan’s capital.
A burning building in Khartoum, September 26, following violent protests in Sudan’s capital.

Sudan’s economy is experiencing one of the most difficult stages in its history, with inflation officially above 40% and the exchange rate of the Sudanese Pound (SDG) dramatically fallen to one US dollar for eight SDG.

The separation of South Sudan in 2011 and the subsequent loss of 75 percent of the national income generated on southern oil exports destabilised Sudan’s economy. It has been further strained by the massive military expenditure required to counter a conflict that has now spread to eight of Sudan’s 18 states.

The economy, previously based on agriculture and livestock, focused on the extraction of oil at the end of the nineties. The economy has thus been ill-equipped to deal with the shock caused by the loss of the majority of the oil revenues following South Sudan’s separation on July 9, 2011.

Speaking at a press conference on September 21, Sudanese President Omar Hassan al-Bashir assured citizens that the austerity measures, including the controversial removal of fuel subsidies will benefit the most vulnerable segments of society through the Office of Zakat (Muslim taxation), in addition to a revised student support fund and an increase in workers’ salaries.

Despite these assurances, there has been growing unease among consumers opposed to the massive rise in commodity prices and the disappearance of foreign currency in the market, worsened by a growing loss of confidence in government officials and institutions run by members of the ruling party.

Sudan’s government has stressed the need to move forward with implementing these new policies, with Federal Minister of Finance Ali Mahmoud insisting these actions were essential to cover the deficit in the state treasury, caused by the requirement to raise the wages of most government officials, which he warned had fallen below poverty levels”.

The unemployment rate continues to rise and the situation for Sudanese citizens, especially in rural communities, will significantly worsen as a consequence of the cut subsidies.

The austerity measures have triggered outrage among the opposition and violent demonstrations across the country. The police dealt harshly with protesters, using batons and tear gas, and firing live rounds, causing the death and injury of hundreds of civilians, whilst over 700 people were arrested.

In the meantime, the National Intelligence Security Service (NISS) has arrested a large number of the leaders of the opposition parties, university students and other activists who were taken to unknown places.

Sudanese opposition leaders, including the leaders of the Sudanese Revolutionary Front (SRF) maintain that the regime is primarily responsible for the degraded state of the economy in the country, accusing them of widespread corruption that has led to public money being used to subsidies the well-being of its members, as well as squandering it on financing internal wars.

These austerity measures implemented by the government of Sudan will not be enough to address the long-term economic distress and will not contribute to the recovery of the economy. The massive security clampdown currently being undertaken is unlikely to prevent resentments from further boiling over. And with no improvement in sight for citizen’s living conditions, it is almost certain that the situation will continue to go from bad to worse.