(Cairo) Sudan’s political rivals have to quickly revert to political tactics and start fixing their country’s economic problems before these problems get worse, specialists have said.
The poor African country’s politicians and Ruling Military Council have failed in seeing the intensity of the economic crisis in their country as they fiddled over power-sharing for months, a process that was mixed with violence and bloodshed.
The economic woes that caused hundreds of thousands of Sudanese citizens to take to the streets for months to ask longstanding president Omar al-Bashir to step down continue to mar Sudan’s life, almost three months after Bashir was forced to leave the office of president.
“These challenges have their toll on the life of ordinary citizens and cause them difficulties,” said Sudanese economist Mohamed al-Nayer. “Sudan is badly in need of economic planning and immediate measures to rescue the economy.”
Commodity prices are rising dramatically as the Sudanese pound loses ground against most foreign currencies, especially the US dollar. Sudan’s monetary authorities liberalized the exchange rate of the pound against all foreign currencies in October last year. The move aimed at eradicating Sudan’s parallel foreign currency market and bringing currency exchange operations back to the official banking system.
Nevertheless, the decision achieved none of its goals as the parallel market continued to thrive and the exchange rate of the US dollar to soar. A US dollar sells for a little less than 70 pounds, both in the black market and at the nation’s banks.
The weakening of the pound has had its toll on the purchasing abilities of the vast majority of Sudanese citizens and consequently on the national poverty rate and the consumer inflation rate.
According to official statistics, around 46% of Sudan’s population of 40 million is living in poverty. Nonetheless, some independent estimates say the national poverty rate is much higher. The consumer inflation rate has reached 45% and it is rising. Sudan aspires to bring the inflation rate down to 27%, according to Abdel Monem Mohamed al-Tayyeb, a senior Ministry of Finance official.
Nevertheless, with Sudan’s ongoing political and security unrest, this goal seems to be far from easy to fulfill. The Sudanese economy is also growing at less than 2%, a growth rate that is far from enough to generate enough jobs for millions of unemployed Sudanese citizens or improve the living conditions of Sudan’s poor.
The national unemployment rate has reached more than 30%, widening the scope of poverty in Sudan, and fueling social strife. Around 20% of the population suffers an acute shortage of food, with the national currency growing valueless day after day. Some commodities are also close to disappearing from the markets, including the flour necessary for the production of bread for Sudanese consumers.
Sudan’s foreign debts have risen to more than $60 billion. But this dramatic surge in debts is the result of decades of economic mismanagement under Bashir, who before his April 11 ouster, completed his 30th year in office.
The turmoil that preceded and followed Bashir’s ouster made things even worse. However, Sudan’s economic problems started a long time before this turmoil. Twenty years of US economic sanctions on Sudan, which ended in late 2017, brought Sudan economically down on its knees.
In 2011, Sudan lost almost two thirds its oil revenues after the separation (independence) of South Sudan, with most of the oil wells being located in the newly-established state. Bashir’s last ditch attempt to rescue the economy was made in December last year, when he raised the prices of fuels and bread, but this proved fatal to his regime, having triggered mass protests that ended in his ouster.
A glimmer of hope appeared on July 5, when Sudan’s political forces and Ruling Military Council agreed to form a sovereign council to run Sudan for the coming three years.
This agreement, Nayer said, would have positive impacts on the economy and the exchange rate of the Sudanese pound. “The exchange rate of the pound will never stabilize without political stability,” Nayer said.