Although there are no precise estimates regarding the extent of the losses suffered by the Sudanese economy in the nearly two months since the outbreak of the conflict on April 15, current data in Khartoum clearly reflect some of the extent of the damage caused by the conflict to the country’s economy.
These data also reveal the fact that each passing day adds more losses to the local economy, in addition to the extension of these effects to neighboring countries, and even to neighboring countries, given the centrality of the Sudanese position.
“Dark” economic landscape
Sudanese economist, Haitham Fathi, in statements exclusive to Sky News Arabia Economy, describes the current situation – particularly in Khartoum – as a “grim scene”, as the problems are likely to worsen further. He explains a number of crisis factors as follows:
Khartoum is almost without factories. All the factories are almost at a standstill, if not completely shut down, in addition to the destruction of a large part of them. Capital depends on consumer materials that are produced in the states of Khartoum, and now the factories are shut down. The biggest production and customs revenues are made by the factories in Khartoum and the various economic units located there, whether service, agricultural or industrial. The highest tax revenue comes from Khartoum as the largest of the states in Sudan and includes a large number of economic units, and thus, by stopping life there, the state revenue is highly affected by this stop. Most Sudanese companies that export are located in Khartoum.
He points to the wage crisis suffered by workers in the government sector. As they have not yet received their salaries for the past month, and some of them have not received their salaries for the month of April, adding: “In addition, there is a shutdown in various government departments, which portends disaster” in various sectors, including health and education.
However, despite the “gloomy scene”, a glimmer of hope still hangs over the current situation in Sudan. The Sudanese economist talks about it in his statements to the “Sky News Arabia” site, as follows:
We have a few options that offer a glimmer of hope in dealing with the economic consequences of the current situation. Sudan has 18 states, while the situation is more incendiary in one state, which is “Khartoum”, and therefore there may be solutions and alternatives depending on other states, such as Gezira State, which is a reputable agricultural state. Some solutions also lie in the possibility of transferring work from inactive factories in Khartoum to other stable states to start business. There are factories in other states that had little production capacity, and these factories can work with maximum energy to increase and increase production rates, to compensate for the shortage after the shutdown of many factories. As for Al-Sarat, and at a time when materials are produced in states other than Khartoum while exporting companies are located in Khartoum, there may be a direct direction from production areas to export areas through the Egypt or Port Sudan.
The Sudanese economist concludes by saying, “We need an emergency government plan to solve the economic problem, ensure the provision of services and find solutions and alternatives to the destroyed economic facilities”.
The Sudanese economy has suffered for years from structural problems, low production, customs and tax evasion crimes, manipulation of prices and export and import bills. This cost Sudan about $5.4 billion a year.
The losses of the economic sanctions imposed on Sudan by the United States exceeded 40 billion and 531 million dollars.
The economic growth rate did not exceed 0.3% at the end of 2022, according to estimates by the Central Bank of Sudan, and the annual inflation rate fell to 63.3% last February, while it was 83% in January.
difficult economic repercussions
For his part, Sudanese economist, Mohamed Al-Nayer, says in exclusive statements to “Sky News Arabia Economy” that:
The conflict of the past two months has had a number of economic repercussions for Sudan. The most important sectors that were specifically affected were the industrial center of gravity of Khartoum. On the other hand, the agricultural and animal sectors have not been affected to the same degree, given that their main activities are in largely stable states.
And he adds: “While the scale of the greatest impact is not due to the conflict alone, but because of the looting and looting that has taken place in a strange phenomenon for the Swani people who were not not known before… and therefore this has strongly affected the economy, in particular the private sector, which has been strongly affected, whether for factories, stores and businesses, whose return to work with the same efficiency take a lot of time.
At the same time, it indicates the extent of the considerable pressures placed on the shoulders of the Sudanese citizen, in particular with the difficulties of the banks and the non-payment of salaries, which requires an effort from the civil government to remedy these conditions.
The “Takween” committee of the Union of Sudanese Engineers had earlier revealed that electronic payment services in banks had stopped due to the absence of an effective plan for the Bank of Sudan and commercial banks to continue. this service in an emergency.
Since April 15, the two parties to the conflict have exchanged accusations of having facilitated and perpetrated looting and robberies in several branches of banks in the capital and other cities, while depositors feared losing their money.
Organized gangs specializing in robberies, known locally as “Nigers”, are currently multiplying in view of the state of security chaos in the country, and the escape of hundreds of prisoners since the start of the clashes, according to the “BBC”. British. website.
Returning to Al-Nayer’s statements, he goes on to say: “There are real difficulties with regard to the living conditions of citizens, especially since the problem of their salaries has not yet been addressed. overall, and there is an effort made by the government in this context… but commercial activity is stable in about fifteen states, and the problems are concentrated in Khartoum and Darfur.
In addition, the Sudanese economist discusses the economic consequences of the conflict at a broader level, with regard to trade relations with countries of the world, in particular neighboring countries, explaining that “with regard to the ports which are located on the Red Sea coast, they’re in the largely stable eastern states, and they’re not. There’s a problem with exports and imports.”
And Al-Nayer continues: “80% of exports and imports take place via the seaports of the Red Sea coast, and about 10% via the road between Cairo and Khartoum, and 10% (mainly exports of ‘or) via the suspended Khartoum. airport, and there are alternatives represented at Dongola and Port Sudan airports.” “.
The International Monetary Fund describes the crisis in Sudan as a “tragic situation”, according to statements by the Fund’s Deputy Managing Director, Antoinette Sayeh, in which she said that “the economy is collapsing due to the current conflict.”
The most difficult stage
African affairs expert Rami Zuhdi said in exclusive statements to “Sky News Arabia Economy” that “the most difficult stage in Sudan does not seem to have begun yet, and the days ahead could be darker. and more painful than the current one”. pointing out the consequences of entering the acquiescence phase. It is a process of separation between extremely difficult living conditions and human conditions which are deteriorating day by day and the numbers of displacements, flight and asylum which do not stop but increase, and at the same time at the same time the fighting does not stop, and a vicious cycle of truces which have failed to be fully enforced and are generally violated.
He adds: “The internal economic conditions are significantly worse than before, on the grounds that the conflict has exacerbated the difficulty, and some States have relied on their basic strategic reserves after the conflict escalated”, explaining that the difficulties encountered by states is exacerbated in light of the central reliance on Khartoum as the capital. .
Zuhdi added: “While there is talk of a relative return to life in some neighborhoods of Khartoum and other states, it appears as an abnormal return, that is, the coexistence or acceptance of the status quo and preparing for long-term fights that will only stop when one of the two sides exhausts its forces.”
He draws attention to “shocking” estimates of daily losses in Sudan of half a billion dollars a day, referring to losses resulting from the disruption of shipping and trade, the cessation of many government companies, etc.
According to the African affairs expert, the situation in Sudan extends its impact not only to the seven neighboring countries, but also to about 17 other countries (neighboring countries), given that Sudan is considered a pivotal country in the region and its economy, strategic, political and societal influence”, and therefore we are talking about a regional problem that goes beyond the borders of the African continent.
The Sudanese economy, originally, is a traditional economy based on agriculture, which contributes 48% of the gross domestic product and absorbs 61% of the country’s workforce.
This country has 170 million acres of arable land, or 40% of the agricultural land of the Arab countries combined, which has earned it the title of “world food basket”.
However, the warfires that have raged since mid-April between the army and the Rapid Support Forces have quickly devoured the global food basket, leaving a large hole that has feared at least 60% of Sudanese who depend on agriculture and animal husbandry. , to be exposed to the specter of famine in the absence of all the logistical aids that allow them to engage in the summer agricultural season.
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