Most foreign aid is still being disbursed, piling pressure on the transitional government
Date: Tuesday, 16 February 2021
Most foreign aid is still being disbursed, piling pressure on the transitional government
February 16, 2021
Sudan’s annual inflation has soared to 304 percent in January from 269 in the previous month amid a worsening economic crisis and a rapid decline of the local currency’s value against the US dollar.
The latest figures from the state statistics bureau are likely to be viewed as further proof of the transitional government’s failure to effectively overhaul the economy, nearly two years after the removal from power of dictator Omar Al Bashir.
Problematically for the government, its Prime Minister, veteran UN economist Abdallah Hamdok, was picked for the job by the pro-democracy movement. The movement had orchestrated months of street protests that forced the military to remove Al Bashir in April 2019.
Al Bashir’s 29 years in power saw Sudan experience its worst post-independence economic crisis.
Sudan’s three-digit inflation rate, believed to be among the highest in the world, is primarily fueled by the rapid decline in the value of the Sudanese pound, which in turn pushes up the cost of imports.
On Tuesday, the dollar was trading on the streets of Khartoum at 390 pounds. The official exchange rate of the dollar remains 55 pounds.
The annual inflation rate in January, according to the statistics bureau, was even higher than 304 per cent in urban areas, reaching 324 per cent, up from 288 in December.
Sudan was finally removed last year from the US list of state sponsors of terrorism, a move that, in theory, should release financial assistance to the country from bilateral sources as well as international aid agencies.
However, it is taking longer than expected for any significant aid to arrive and alleviate some of the economic woes endured by the vast Afro-Arab nation of some 40 million people. Already, this month saw a series of street demonstrations in Khartoum protesting bread and fuel shortages. The street protests that eventually led to the removal of Al Bashir were originally sparked by a hike in bread prices.
The country’s economic woes, meanwhile, are likely to compound Sudan’s already bumpy shift to democratic rule and raise questions on whether the civilian-led government of Mr Hamdok is qualified to lead the country at a difficult time.
In a surprise move, Mr Hamdok last week handed the key finance ministry to a veteran rebel leader from the western Darfur region. The move was part of a reshuffle chiefly designed to include rebel representatives in the 25-member cabinet.
The inclusion of rebel representatives was made in accordance with the terms of a peace deal signed in October between the government and rebel groups from the south and west of the country.
