Monetary Crisis in Sudan

Monetary Crisis in Sudan

Tuesday, 24 April, 2018 - 07:45
Customers look on as a vendor displays fresh produce in Khartoum, Sudan. (Reuters)
Khartoum – Ahmed Younes
Where is Sudan heading? This is a question that is being asked among the people, who are beset by several crises, some affecting salaries, scarcity of monetary liquidity, a fuel shortage and the rise in prices.

The living and economic crises deteriorated in the past months and peaked when Foreign Minister Ibrahim Ghandour filed a complaint to parliament regrading the government’s failure in paying diplomat wages and rental fees of Sudan embassies abroad for seven consecutive months.

Less than two days later, President Omar al-Bashir sacked the minister without giving any reason.

Diplomats are not the only ones’ whose salaries have been delayed, but teachers protested in Khartoum on April 12 to complain over unpaid wages.

After initial denials, the Bank of Sudan acknowledged the salaries crisis.

It said that it was working on revising the delayed foreign ministry dues, estimated at USD29 million of its budget. Ghandour put the figure at USD30 million.

Meanwhile, to confront the crisis, the government was forced to implement strict austerity measures that led to a deterioration in the national currency exchange rate.

This consequently impacted the prices of main food products, with the price of a loaf of bread rising from SDG0.5 to SDG1.

This sharp rise in prices sparked protests in early 2018, but they were confronted with a fierce crackdown by authorities that saw the arrest of hundreds of political leaders and activists.

They were released by a presidential decree in early April.

The reasons that led to rallies have however persisted.

A presidential committee, formed by the governor of the Bank of Sudan and ministers of the economic sector, took in February decisions to face the sharp rise in prices and to put an end to the deterioration of the Sudanese currency.

Their decisions created a severe liquidity crisis, but they did partially stop the deterioration in the currency which saw the exchange rate rise to SDG34 to the dollar, when it was previously SDG45.

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