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The Sudanese economy after the “coup” .. Fears of the next scenario

A week after the Sudanese army seized power in the country, dissolved its partnership with civilians and transitional institutions, and declared a state of emergency in the country, the internal economic situation began to improve, despite international pressures, but an economic expert warned that Sudan will suffer greatly if the existing political crisis continues. 

On October 25, the Army Commander, Lieutenant General Abdel Fattah Al-Burhan, issued a number of decisions affecting his civilian partners in the political institutions during a transitional period that was supposed to allow Sudan to transition to democracy in 2023 after the fall of Omar al-Bashir’s 30-year rule.

The move led to a wave of international condemnation and calls for a return to civilian rule, with warnings to halt economic support for the country, which is already overwhelmed, as the population faces shortages of basic commodities including food and medicine, and a third of them need urgent humanitarian support.

After the gas stations in Sudan witnessed long queues over the past period due to the lack of content, the queues were absent, while the prices of some simple commodities fell, according to what the Sudanese activist, Ahmed Al-Badawi, describes to Al-Hurra website. 

Doubts about a breakthrough in the fuel crisis in Sudan
Doubts about a breakthrough in the fuel crisis in Sudan

Al-Badawi says: “The prices of some very simple necessities, the most prominent of which was sugar, which was about 40,000 Sudanese pounds for fifty kilograms, corresponding to approximately $100, to 17,000 Sudanese pounds, or about 30 dollars only.” 

But the executive director of Unicons Consulting and the Sudanese economic expert, Abda Al-Mahdi, says that the price of sugar has fallen to about 25,000 Sudanese pounds ($56). 

Al-Badawi believes that “gasoline has become abundant, because there has been no movement of cars since the coup, and there has been civil disobedience, but workers in some interests such as banks will go to work tomorrow, which makes us wait for whether or not gasoline will still be present at gas stations.” 

Al-Badawi adds that there is still a “high cost of living and the prices of many commodities such as a loaf of bread, whose price has risen to 40 Sudanese pounds, with very long queues for subsidized loaves that are sold on a small scale at five pounds,” after its price was two pounds a while ago. Just. 

He continues, “The army is spreading rumors about the provision of foodstuffs and strategic goods, but in reality they are not widely available.” 

Al-Mahdi asserts that, “Indeed, the queues at the gas stations disappeared two days ago, and the price of sugar and some needs decreased to a limited extent, and I do not have an integrated explanation for that.”

However, she added, “But it is still too early to judge whether the economic and living conditions have improved or worsened.” 

And she added, “The opening of Port Sudan port may also have a positive impact, and there will be a breakthrough for some goods and materials such as medicines, but it will only improve the situation temporarily.” 

The sit-in was lifted in Port Sudan after about a month and a half, as groups protested the “marginalization” of eastern Sudan and demanded the dismissal of the government of Prime Minister Abdalla Hamdok, and the amendment of the peace agreement concluded in Juba last year. 

The closure of Port Sudan port in the east for a month and a half by protesters against Hamdok's government sparked a crisis in basic commodities
The closure of Port Sudan port in the east for a month and a half by protesters against Hamdok’s government sparked a crisis in basic commodities

The imposed blockade has caused supply shortages around the country, heightened tension in Sudan, which is mired in economic stagnation due to decades of conflict, and complicated challenges for the civilian government, whose popularity has been dented by its economic reforms.

lack of aid

But Al-Mahdi stresses that opening the port is not enough and that it is a good thing “in the medium term, as the situation will be affected very greatly due to the global boycott and the cessation of international aid, which will reflect on government revenues and the flow of strategic goods.” 

She said, “The situation in the state’s public treasury was very difficult, and the government had to print money in order to spend it on salaries.” 

She adds, “We were expecting $150 million to support government revenues and salaries from the International Monetary Fund, in addition to $500 million to support the treasury, and we also have a $2 billion development aid program with the World Bank, but we don’t know now its fate, which, mostly It will not act until the political crisis in the country is resolved.” 

The United States responded to the military takeover with condemnation, and decided to freeze the disbursement of $700 million in economic aid to Sudan.

In this context, Reuters news agency had quoted a US State Department official that Sudan’s demand for debt relief, which amounts to tens of billions of dollars, will not happen as long as the army is trying to direct Sudan unilaterally.

And the United States warned, on Wednesday, through State Department spokesman Ned Price, that “not returning to the democratic path in Sudan will deprive the country of $4 billion in international aid.” 

Although the two most powerful men in Sudan, the army chief, Abdel Fattah al-Burhan, and the commander of the Rapid Support Forces, Muhammad Hamdan Dagalo, nicknamed “Hemedti”, have close ties with Gulf countries that can provide Sudan with money, such as Saudi Arabia and the UAE, an American, Saudi, and Emirati statement Britain jointly, issued on Wednesday, called for the full and immediate restoration of the civilian-led transitional government and institutions in Sudan.

The Quartet statement demanded the release of all detainees against the backdrop of recent events and the lifting of the state of emergency in Sudan.

The four countries stressed the importance of adhering to the constitutional document and the Juba Peace Agreement as a basis for further dialogue on how to restore and strengthen a true civil-military partnership for the remainder of the transitional period pending the elections.

Al-Mahdi believes that the economic situation has deteriorated significantly during the era of the civil government due to its delay in the economic reforms requested by international organizations, such as lifting fuel subsidies and unifying the exchange rate, given the political conflicts. 

But Al-Mahdi asserts at the same time that “it was time to reap the achievements that the revolution caused in opening up to the Western world, in terms of debt forgiveness, aid flows, and economic reform.” 

“The people will not rest.”

On Wednesday, Al-Burhan announced again the imminent formation of a civilian government of technocrats. 

During his meeting with the African Union’s Special Envoy, Opolisjan Obasanjo, he said that he is “in the process of appointing a prime minister who will appoint a civilian government of technocrats.” 

Al-Badawi does not believe that there will be a breakthrough in the economic crisis soon, “with the collapse of all state institutions, and there is no reason for the basic needs to be available in the absence of foreign monetary support.” 

For her part, Al-Mahdi says, it is difficult to imagine that the economy will improve, in light of the continuation of the current situation and the army’s control of state institutions, “because the people will not calm down, and therefore there will be no stability, and the international community will not return aid and support the state treasury.” 

Al-Mahdi expresses her hope that “there will be a quick political solution until the situation returns to what it was and the important external support for the country, otherwise there will be a very big problem in the state treasury, and the exchange rate will be greatly affected.” 

Demonstrations in Sudan continue to protest the army's seizure of power
Demonstrations in Sudan continue to protest the army’s seizure of power

Earlier, Hamdok confirmed that the release of the detained ministers and the return of his government to start its work, constitute an “entrance to solve the crisis” in Sudan, according to what the Ministry of Information in the dismissed government reported on Monday.

Volker Perthes, the United Nations envoy to Khartoum, had announced, on Monday, that there are “mediation” efforts underway in Sudan and abroad, to find a way out of the crisis in this country.

The State Department confirmed, on Wednesday, that the United States is in contact with Egypt and the Gulf states, as well as Israel, noting that “there is a consensus on the importance of the stability of this country.” 

Price stressed that the international community calls for a “quick return to the democratic process in Sudan and the return of a civilian-led government, and any failure to do so will reinforce Sudan’s isolation.” 

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