Several times a week, the 45-year-old accountant lines up at one of the few ATMs in Khartoum still dispensing banknotes, waiting hours to withdraw the daily maximum of 2,000 Sudanese pounds ($42). That sum’s being spread increasingly thinly to feed his family, as inflation in the North African nation hits its highest in two decades, quashing hopes 2017’s lifting of U.S. sanctions could spur an economic revival.
Despite lifting most sanctions, the U.S. still lists Sudan as a state sponsor of terrorism, a designation that officials blame for the lack of significant new investment. Inflation is almost 70 percent, and the pound trades at 47.5 per dollar, plunging from 18 in January. The International Monetary Fund says the economy may contract 2.3 percent this year.
“People lost confidence in the banking system,” says Hamid Eltagani, a Sudanese economics professor at the American University in Cairo. “The economy is becoming more of a rudimentary system of barter-exchange and the government has no instrument to entice cash into the banks.”
While the U.S. sanctions — imposed in 1997 on terrorism allegations — hit Sudanese government agencies that provided essential services, the nation’s elites often found ways to circumvent them, setting up companies that benefited from preferential access to hard currency and contracts.
Al-Bashir has repeatedly blamed Sudan’s economic troubles on alleged plots by the U.S. and other Western countries. He’s said “fat cats” including unidentified bankers, black-market traders and smugglers also bear responsibility.
Prime Minister Mutaz Musa in October announced a 15-month plan to trim inflation and cut spending. Vowing to strictly monitor government expenditure, tackle corruption and protect those on lower incomes, he ruled out any removal of subsidies in 2019’s budget. Their withdrawal in January for flour and electricity sparked protests and dozens of arrests.
For Abdullah Ismail, 55, his day job isn’t enough to make ends meet. The Sudan Railways Corp. workshop employee spends half his 4,000 pounds monthly salary on rent, then has to eke out food, transportation, electricity and school fees with the rest.
Debtor’s Prison
He borrowed 10,000 pounds from a local bank to buy a small taxi and make extra money. But the fresh earnings were eaten up by rising expenses; he hasn’t been able to make repayments for six months. “I failed and I’m in danger of being imprisoned,” for the outstanding debt, Ismail said.
Losing oil plunged Sudan into crisis, but the country’s involvement in a new deal to end South Sudan’s five-year civil war could bring compensation.
As landlocked South Sudan boosts its crude output, that may mean extra revenue for Sudan, which collects fees for transporting oil by pipeline to a port on the Red Sea. Sudan pumped about 86,000 barrels per day of its own oil last year, according to BP Plc.
Oil Replacement
Gold has been touted as a replacement to oil, and exports of about 10.7 metric tons brought in $422 million in the first half of 2018, the Minerals Ministry says. But the government complains most exports don’t go through official channels and has promised steps against smuggling.
In the meantime, Sudanese like Zahra Ahmed — a 21-year-old arts student at the University of Khartoum — are looking for any work available to cover their expenses and tuition.
“My family can’t manage to provide that for me as well as my two sisters,” she said.