Sudan economy on brink of collapse following nearly a year of war

Friday March 08 2024

People gather to ride a truck to flee outside Khartoum, Sudan during clashes between the paramilitary Rapid Support Forces and the army on April 28, 2023. PHOTO | REUTERS


Largely ravaged productive sectors, stagnating exports, severely devalued national currency, and plummeting public revenues.

The nearly one year of war in Sudan has pushed the country's economy to the brink of paralysis.

"According to official estimates, there has been a significant contraction of 40 percent in the gross domestic product (GDP)," a prominent feature of the Sudanese economy's declined performance due to the ongoing war, Abdul-Khaliq Mahjoub, a Sudanese economic analyst, told Xinhua.

According to the expert, the war between the Sudanese Armed Forces (Saf) and the paramilitary Rapid Support Forces (RSF) affected every aspect of the Sudanese economy, covering the industrial, agricultural, mining and service sectors.

Read: Sudan army pits state on collapse

Sudan's agricultural sector, representing more than a third of its GDP, has been severely affected by "the loss of financing and production inputs, including fertilisers, seeds, and fuel," Abdul-Qadir Abdoun, a member of the Northern Sudan Farmers Union, told Xinhua.


"Northern Sudan is the main agricultural region in the country, but because of the war, our agricultural activity declined this year, while the cultivated areas diminished due to farmers' inability to finance agricultural operations, the hike in fuel prices, and the continued power outages," Abdoun said.

According to a report by the Sudanese Agricultural Bank, the cultivated area in Sudan declined by 60 percent compared to previous years.

Due to the decline in agricultural activity in Sudan, the UN Office for the Coordination of Humanitarian Affairs (Ocha) said in its latest report that, with expectations of a reduced upcoming harvest, staple food prices are likely to remain atypically high in the harvest season.

When it comes to trade, Ayoub Abdul Hafeez, a Sudanese economic analyst, said that the export movement has declined by about 60 percent due to the closure of the Khartoum International Airport and the suspension of most dry ports.

"The war led to a decline in the volume of exports in vital areas, including livestock, gold, and gum Arabic, which, in turn, led to a decline in the export revenues," Abdul Hafeez told Xinhua.

Read: Sudan conflict threatens supply of gum arabic

For Al-Samani Abdalla, a Sudanese businessman, the complications of the war have pummeled their business.

"The war has destroyed our commercial activity in the field of imports and exports," Abdalla said, noting that on top of the closure of air and dry ports, the Ministry of Finance's decision to raise the customs tariff index by about 46 percent poses "a second obstacle."

Meanwhile, the closure of about 60 percent of the branches of the country's main banks also cripples the movement of imports and exports due to the loss of funding and bank credits, the businessman added.

Since the onset of the war last April, the Sudanese pound has continued to decline against foreign currencies, losing more than 50 percent of its value, where one US dollar is currently traded for more than 1,250 Sudanese pounds in the parallel market, compared to 600 pounds before the war.

According to the International Monetary Fund (IMF), the war also raised the unemployment rate in Sudan from 32.14 percent in 2022 to 47.2 percent in 2024, while a study by the American Food Policy Institute predicted Sudan to lose 5 million jobs due to the war.

Meanwhile, according to IMF's data, the inflation rate in Sudan jumped to 256.17 percent, an increase of 117.4 percent.

Read: Sudan factions shift to economic sabotage

The Sudanese government has not yet issued any reports on the inflation rate due to the war.

Recently, the Sudanese Minister of Finance Jibril Ibrahim, announced that the country's revenues had dropped by more than 80 percent due to the ongoing war.

According to the United Nations, half of Sudan's population -- some 25 million people -- needs humanitarian assistance and protection, with nearly 18 million people facing acute food insecurity.

Sudan has been witnessing deadly clashes between the Saf and the RSF since April 15, 2023.

More than 13,000 people have been killed since the fighting broke out, while more than 8.1 million people have been displaced inside and outside the country, according to recent estimates released by the Ocha.