By Eltayeb Siddig , Nafisa Eltahir and Khalid Abdelaziz
OMDURMAN, Sudan, Sept 21 (Reuters) – The Sudanese pound has haemorrhaged nearly half its value in army-held territory since the start of the summer, piling misery on civilians trying to rebuild their lives and complicating authorities’ efforts to project normalcy in areas they control.
The collapse is one of the most dramatic since Sudan’s armed forces and the paramilitary Rapid Support Forces went to war nearly 3-1/2 years ago and is putting even basic commodities out of reach for many.
“These people you see shopping won’t be able to anymore,” said Aisha Younis, a former teacher, standing in front of a butchers shop in Omdurman, a city adjoining Sudan’s capital, Khartoum. “It’s chaos.”
The war has spread hunger and disease across Africa’s third-largest country by area, split it into rival areas of control, and laid waste to the economy, which authorities have struggled to revive as they encourage millions of refugees to return home.
The Sudanese pound was trading at around 7,500 pounds to the dollar in the black market on Tuesday, strengthening somewhat from recent highs of 8,000 but still well above the rate of 4,100 in May.
Before the war, the pound traded at about 600 to the dollar. The central bank no longer updates the official exchange rate, while the Bank of Khartoum, the country’s largest bank, offers a rate of 4,200 pounds.
‘ECONOMIC PARTITION’
Part of the problem lies in the “economic partition” of the country, which has deprived army-aligned authorities of key exports, said Suliman Baldo, head of the Sudan Transparency and Policy Tracker.
Though the army has recovered territory after losses early in the war, large portions of the country’s gold, livestock, oilseeds and gum arabic are produced in areas under RSF control, where the exchange rate for the pound has remained relatively stable in recent months, at about 4,200.
Sudan’s official gold sector – its main source of foreign currency – reported production of 70 tons of gold last year, but only 14.7 tons were reported as exports by the central bank.
Much of what is still produced in army-held territory does not make it into the state budget, but is instead diverted for weapons purchases or funnelled into patronage networks, Baldo said.
Until these problems are addressed, “there will be no stable economy in Sudan,” he said.
Finance Minister Jibril Ibrahim did not respond to requests for an interview, but in a press conference earlier this month he pointed to the need for foreign currency to fund the war and reconstruction, as well as the loss of export revenues.
“We cannot deny that the citizen is truly suffering,” he said.
BARE SHELVES
The lack of official revenues means importers fund purchases of many key goods, such as fuel and wheat, with dollars purchased on the black market, said a former central bank official who asked not to be named because he was not authorised to speak publicly.
The return of displaced people has pushed up demand, and prices. About 5 million out of 14 million people displaced by the war have returned to their homes, mainly in areas the armed forces retook from the RSF, according to the International Organization for Migration.
Younis, the former teacher, described how a litre of cooking oil had jumped from 17,000 pounds to 23,000 in just a week.
Shopkeepers in the market where she was shopping said sales were down as much as 70% from normal rates, and some store shelves were bare.
Almutasim Abdulrahim, who runs a private school in Omdurman, said he is paid about 500,000 pounds a month, which would’ve been a relatively healthy $800 before the war but is now about $70.
That has forced him to work part-time as a driver, he said, and to avoid acquaintances when buying breakfast as he can’t afford to invite them to join as he typically would.
“We are hesitant to do things we used to take for granted,” he said.
(Writing by Nafisa Eltahir; Editing by Alexander Dziadosz and Aidan Lewis)
Comments