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Economic Collapse in Sudan is Rapidly Accelerating

Today’s report from Radio Dabanga is at once harrowing and deeply revealing (see below). The Central Bank of Sudan, which has only an exceedingly small amount of foreign exchange currency (Forex), has banned any non-governmental agent or business from using its own Forex for imports. One way or another, in other words, the National Islamic Front/National Congress Party regime is determined to arrogate to itself all Forex (also known as “hard currency,” currency not subject to the massive inflation rates presently ravaging Sudan).

This is, as the Radio Dabanga headline suggests, “disastrous”: it means that even food (i.e., flour for bread) and medicines cannot be imported, commodities desperately needed by the people of Sudan. And it means even greater inflation for the price of bread, the staple food for many Sudanese families. Having already suffered a 300% increase in the price of bread with the promulgation of the 2018 budget (in late December 2017)—and another 25% increase this past weekend—prices are set to skyrocket even further upwards. And the ban on use of private Forex to import even the most critical medicines will certainly cost lives, and put many medicine beyond the financial reach of millions of Sudanese.

The rapacious effort to deny the use of Forex for imports reflects a desperate attempt by the regime to halt the precipitous slide in the value of the Sudanese Pound, which continues to lose value at an extremely rapid rate because it is not backed by hard currency. Black market trading in the U.S. dollar, the benchmark hard currency, reveals that there is no bottom to the decline (see details in Radio Dabanga dispatch below).

Professor Hamid Eltigani, the head of the Department of Public Policy and Administration at the American University (Cairo) accurately notes that these “‘economic measures will have disastrous consequences in a matter of days.’ He stressed that “with these measures the government will force the flight of investors, exporters, importers, and halt trade.”

This will be a catastrophe of the first order and certainly generate more popular protest, almost certainly on a larger scale, with a corresponding increase in violent repression by the regime.

The lifting of U.S. sanctions, hailed by so many foolish observers, has simply proved to be the starting point for utter disaster in the Sudanese economy. The root issue was never sanctions, but decades of gross economic mismanagement and equally gross self-enrichment by the NIF/NCP regime—a fact that the international community simply refused to acknowledge. The most spectacular example remains that of Edward Gemayel, speaking as the IMF’s Mission Chief for Sudan:

“Mr. Edward Gemayel, the IMF’s Mission Chief for Sudan noted that ‘Sudan has a long track record of implementing sustainable economic policies.'”(IMF press release, October 12, 2013)

This was cynical mendacity on the part of Gemayel, but had no effect on his career and gave cover to those who wished to ignore the policies we see culminating in the present catastrophe. But this looming catastrophe was there for all to see at the very time Gemayel was serving as dissimulator-in-chief for the Khartoum regime. See |

“Watching the Bubble Burst: Political Implications of Sudan’s Economic Implosion,” Eric Reeves for the Enough Project Forum, 17 September

2014 |

“Kleptocracy in Khartoum: Self-Enrichment by the National Islamic Front/National Congress Party,” Eric Reeves for the Enough Project Forum, December 2, 2015 |

It was simply not in the perceived self-interest of various international actors to acknowledge the scale and consequence of Khartoum’s immensely destructive economic policies or the extent of the kleptocracy that lies at the very heart of the regime, and generates most of its “political support” from corrupt cronies.

Now the people of Sudan will suffer terribly, one way or another, as a consequence of this self-serving myopia. Further demonstrations and popular protests are inevitable—but so, too, is violent repression by the regime and its ruthless security forces. Newspapers will continue to suffer extreme censorship, especially when it comes to the topics of the economic crisis or protests; demonstrations will be met with increasing violence—excessive and indiscriminate use of tear gas, beatings, incarceration and torture (especially of political leaders and activists); and ultimately, if génocidaire-in-chief Omar al-Bashir determines it necessary for his survival, the use by the police of live ammunition accompanied by “shoot to kill” orders, as was the case in September 2013.

Will the army continue to be quiescent in the face of the slaughtering of Sudanese civilians? There were signs in September 2013 that many in the army were appalled, and at least one officer, a major, left the army in protest. The National Intelligence and Security Services, Military Intelligence, and other intelligence organizations will undoubtedly stay loyal to al-Bashir and his cronies: their lives and livelihoods depend upon it. But the army will survive regime change as an institution, if one thoroughly corrupted by 29 years of purges and re-shaping by the NIF/NCP regime. Its mid-level officers—especially colonels and majors—may well decide that the only way to regain any favor among the people of Sudan is to support them if they again face “shoot to kill” orders issued to the police and security services.

But in the short term, only increasingly hardship and violence loom for the people of Sudan—hardship and violence that the international community ignores and refuses to address in its relations with the Khartoum regime.

“Disastrous consequences” predicted as Central Bank of Sudan bans imports | Radio Dabanga, February 8, 2018 | KHARTOUM |

The Central Bank of Sudan (CBoS) has banned any import operations by banks without obtaining its prior approval. On Wednesday a CBoS circular banned any agent from importing resources using their own foreign currency.

Professor Hamid Eltigani, the head of the Department of Public Policy and Administration at the American University, described the decision as “a police security measure that has nothing to do with economic measures that will have disastrous consequences in a matter of days.”

He stressed that “with these measures the government will force the flight of investors, exporters, importers, and halt trade.”

He stressed that the CBoS circular will lead to more failure and scarcity in building materials, fuel, medicines, and commodities such as flour.

Cheques unpaid

Customers in Khartoum said that many banks have failed to pay cheques on the pretext of lack of liquidity. Faisal Islamic Bank customers have complained that they could not withdraw the amounts they wanted to withdraw from their accounts. They pointed out that the highest amount to be paid is between SDG 2,000 and SDG 3,000 (*$100-$160). The former director of the CBoS, Sabir Mohamed El Hasan has warned at a seminar held by the economic committee of the Parliament of the country’s reaching stage of economy of scarcity.

Indicative rate

On February 5, the CBoS raised the indicative exchange rate of the US Dollar from SDG 18 to SDG 30. Last week the Dollar price rose by two Pounds within two days on the parallel forex market, to SDG 42. The US Dollar has increased in less than three months by 125 per cent, and sharply increased in the last week. In November 2017, the Dollar traded at SDG 28.

On Sunday, currency dealers crowded near several Sudanese banks against the backdrop of the unprecedented scarcity of the national currency, increasing public demand for the Pound.

On Monday, a large number of ATMs of commercial banks in the capital city Khartoum went out of service, either owing to the network being inactive, or as there is no cash available. This included ATMs in Sharj El Nil and Bahri.

See also very recent Tweets/commentary on economic collapse:

Eric Reeves‏ @sudanreeves Feb 7

In Darfur, in White Nile State, in Khartoum and elsewhere: inflation rages on, accompanied by growing shortages. Lines for bread make clear these shortages are affecting the lives of all ordinary #Sudan/ese. The NIF/NCP regime remains squarely in cross-hairs of popular protests:

Eric Reeves‏ @sudanreeves Feb 6

More popular protests in the making as economic crisis continues to deepen in #Sudan. Fueled by bread shortages in Khartoum & new spike of 25% in bread prices (on top of previous 300% increase). Rapid withdrawals of savings from banks become inevitable, thus deepening the crisis:

Eric Reeves‏ @sudanreeves Feb 5

Khartoum regime resorts to fantastic explanation of new round of explosive inflation in #Sudan—“psychological diseases”! What could be a more desperate response to hard economic realities crushing ordinary people with unsustainable prices for basic goods, including bread and oil?

(c) 2018 SUDAN Research, Analysis, and Advocacy

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