World

Sudan's Economy…The Pressure of War and the Promise of Reconstruction

At the beginning of each day, as Saeed Youssef prepares to move to his office at one of the city's government agencies, a number of questions come to his mind. Port Sudan East SudanQuestions about the cost of living and how he will face them with his salary, which has been cut by a certain percentage since the outbreak of the war last April, and he no longer receives only about 50 US dollars, which is barely enough to sustain him for a few days as a single young man in his thirties.

Yusuf didn’t have many answers, as they were related to factors beyond his control, but he looked within his available resources for opportunities to increase his income, which had collapsed after the war began.

The situation is no different for his friend Muhammad Ali, who, when we meet him, is working for a service that transports citizens in small vehicles (rickshaws) in search of additional income as his government job salary has been reduced, resulting in a decrease in his purchasing power.

Employee Muhammad Ali
Employee Mohammed Ali, like other employees, relies on extra work to cover expenses (Al Jazeera)

Ali said the cost of living has increased exponentially, leaving workers like him with no choice but to look for extra work to ease the burdens and obligations of life.

The conditions of Sayyid and Mohammed Ali reflect the reality of official data on the economic situation in the country, which has been bearing the weight of war for nearly 15 months.

Crash Indicators

In turn, economic expert Hassan Ayoub monitors that the most significant impact of the war is the deterioration of citizens' purchasing power, with inflation rising by about 140% over the past year and prices rising sharply, in some cases by five times. For example, it was possible to rent a decent house in Port Sudan for 100,000 pounds, but now the cost of renting the simplest house on the outskirts of the city may reach 500,000 pounds (official exchange rate: about 600 pounds to 1 dollar, rising to 1,900 pounds on the black market).

The economic expert explained that Sudan's minimum guaranteed income, estimated at 35,000 pounds, can only meet a few needs, noting that a family of five members would need about 20,000 pounds a day to meet basic needs, not counting emergencies such as illness.

Economist Hassan Ayub
Hassan Ayyub: Some international reports say Sudan has suffered losses of around $100 billion (Al Jazeera)

He noted that there is currently a lack of accurate estimates of the war losses, with some international reports saying Sudan's losses are around $100 billion, and that this figure is likely to rise as the war continues.

Interpreting the main indicators of the Sudanese economy, Sudanese Finance Minister Jibril Ibrahim confirmed the poor economic situation and said that state revenues fell by more than 80% and exports fell by more than 60%, accompanied by a huge demand for imported goods to replace the goods produced by the closed factories, which put great pressure on the local currency.

The minister noted that remittances from the diaspora had stopped and oil production had suffered, falling from 55,000 barrels per day before the war to 18,000 barrels per day.

Employee wages

Ibrahim spoke of the challenges the ministry faces in providing a proper budget to guarantee the salaries of federal employees and pay them regularly, even after deciding to pay only 60 percent of the salaries of employees in some government agencies.

Despite these difficulties, Jibril Ibrahim said his ministry has not given up thinking beyond the war and has set up a committee headed by the finance minister to develop a reconstruction plan, which includes strengthening Sudan's various resources and building strategic relations with different countries.

Sudan's Finance Minister Jibril Ibrahim
Sudan's finance minister confirms the hardships of war have not stopped thinking about reconstruction plans (Al Jazeera)

Economic expert Hassan Ayub believes Sudan needs a “Marshall Plan” to rebuild everything destroyed by the war and warns that it must not repeat the mistakes of the past, especially as economic activity is concentrated in the Khartoum area.

Ayub added that after the outbreak of war in the region, the flow of factories that supply most of the goods to Sudan was paralyzed, so it is unreasonable to allocate factories according to the nature and characteristics of Sudan's regions. According to him, Khartoum's oil factories are hundreds of kilometers away from agricultural material production areas.

The expert linked the success of any future economic plan to the need to reach a political consensus on a national project that guarantees national stability and a peaceful transfer of power, allowing to attract foreign investments.

Ayub stressed that attracting foreign investment is necessary to develop Sudan’s many abundant natural resources, as local capacity is unable to provide the financial resources and appropriate technology required to develop these resources.

He nominated a number of sectors as the main sources of resources needed for the reconstruction plan to succeed, including mining, fisheries, ports and tourism.


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