Sudan’s economy battered by conflict

Sudan’s economy has been severely impacted by the ongoing conflict that erupted in April 2023 between the Sudanese Armed Forces (SAF) and the paramilitary Rapid Support Forces (RSF). This conflict has devastated the country, deepening an already dire economic situation and pushing millions of people into poverty.

Economic Impact of the Conflict

1. Disruption of Key Sectors:

• Agriculture: Sudan’s agriculture sector, which is a backbone of the economy, has been heavily disrupted. The fighting has made it difficult for farmers to plant and harvest crops, leading to food shortages and skyrocketing prices. The lack of access to farmlands, coupled with the displacement of millions of people, has exacerbated food insecurity.
• Oil Production: Sudan’s oil industry, a critical revenue source, has also been affected. Fighting near oil fields and key infrastructure has led to a decline in production, reducing the country’s export earnings and worsening the fiscal deficit.

1. Hyperinflation:

• The conflict has driven up prices for basic goods and services, leading to hyperinflation. The Sudanese pound has rapidly lost value, making imports prohibitively expensive and further straining the economy. As a result, the cost of living has soared, with many Sudanese citizens struggling to afford necessities.

1. Currency Devaluation and Black Market:

• The ongoing conflict has significantly weakened the Sudanese pound, with the currency losing value at an alarming rate. The official exchange rate has become disconnected from the black market rate, where the pound trades at a much lower value. This has fueled a thriving black market for foreign currency, further destabilizing the economy.

1. Displacement and Humanitarian Crisis:

• The conflict has displaced millions of people within Sudan and forced many others to flee to neighboring countries. This massive displacement has not only strained Sudan’s already limited resources but has also disrupted local economies, particularly in conflict-affected regions. The humanitarian crisis has overwhelmed aid organizations, with millions in need of urgent assistance, including food, water, and medical supplies.

1. Collapse of Public Services:

• The ongoing conflict has led to the collapse of public services, including healthcare, education, and sanitation. Hospitals have been damaged or destroyed, medical supplies are scarce, and healthcare workers have fled conflict zones, leaving many without access to essential medical care. Schools have been closed, disrupting the education of millions of children.

1. Impact on Trade and Investment:

• Trade has been severely disrupted, with many businesses closing down due to insecurity and a lack of supplies. Foreign investors have pulled out, and international trade partners have reduced their engagement with Sudan, fearing instability. The country’s ports and transport infrastructure have also been targeted in the conflict, further hindering trade and economic recovery.

International Response and Aid

The international community has expressed concern over Sudan’s deteriorating economic and humanitarian situation. However, efforts to provide aid and broker peace have been hampered by the ongoing conflict and the lack of a unified government. Humanitarian organizations face significant challenges in delivering assistance, with many areas inaccessible due to fighting.

Prospects for Recovery

Sudan’s economic recovery depends heavily on the resolution of the conflict and the establishment of a stable government capable of implementing reforms. The country will need substantial international assistance to rebuild its economy, restore public services, and address the humanitarian crisis. Without a lasting peace, however, Sudan’s economy is likely to remain in a state of collapse, with millions of people continuing to suffer.