Khartoum: Altaghyeer
On 15 April, Sudan marked a year since plunging into a senseless war, as it was described even by both warring parties; the Sudanese Armed Forces (SAF) and paramilitary Rapid Support Forces (RSF).
The ongoing war is having a devastating impacts on the country’s economy according to local, regional and international statistics.
Specialists said the ongoing war in Sudan has resulted in the destruction of 65% of the agricultural sector, 75% of the industrial sector and 70% of the service sector while the Chamber of Commerce estimates the direct financial losses of its members at 5 billion dollar.
Official estimates:
There are no official statistics on the total economic losses, but the Minister of Finance, Dr. Jibril Ibrahim had estimated, at the end of last year, that the country’s economic losses might reach 200 billion dollar, not counting the lost economic opportunities for the country.
Economic contraction:
The International Monetary Fund expected the Sudanese economy to contract by 18.3% during the year 2023 and more than 3 million people would lose their jobs.
The World Bank said the war has caused a decline in the citizens purchasing power as the value of the national currency decreased while the commodity prices sharply increased.
Oil sector:
The losses in the oil sector are very large. Sudan lost about 210 thousand barrels of crude as a result of destruction of the crude warehouse at Al-Jaili refinery north of Khartoum.
The Sudanese Oil Minister, Mohieddin Naim Mohamed Saeed, estimated, in an interview with the Sudan News Agency (SUNA), the destruction inflicted on energy and oil sector at $5 billion.
Sudan produces about 60,000 barrels of oil per day, representing 40% of its needs.
Industrial losses:
The Ministry of Industry revealed that about 90% of factories in Khartoum State and some other states have been destroyed in the war.
More than 400 factories were nearly completely destroyed, according to the Chamber of Industry.
Collapse:
Researcher and economic analyst Dr. Alalah Abdel Razeq described, in an interview with Altaghyeer, what happened as a complete collapse and systematic destruction of large sectors of the infrastructure, noting that some estimates and reports issued by international organizations indicated that the costs of this war are more than 100 billion dollars.
Also, volume of the economic activity has dropped at a rate of 50-60% and the economy contracted by more than 18%; the worst ever in the history of the country, said Abdel Razeq.
He said because of the war the country’s exports fell to an equivalent of only 10-12 million dollars per month. The country has also lost 6.4 billion dollars in development aid provided to Sudan by international and regional financing institutions, which was allocated for the development of some projects.
The Paris Club also suspended relief of the Sudan’s debts and financial arrears.
Abdel Razeq said the 2024 budget, which was allocated to war funding and security operations, has no room for production and social services, such as health and education, because it has already lost 80% of its revenues due to the war, thus living conditions will deteriorate further.
Agricultural sector: Economic researcher Ahmed Ibn Omar told Altaghyeer that what happened in the agricultural sector is a massive deterioration. He gives an example of sorghum crop whose production was 3 million tons in previous seasons, but it dropped in 2023 by 43% compared to the previous year. Millet production in 2023 amounted to about 683,000 tons, which is 64% lower than the production of 2022. Wheat production was 377,000 tons, which is approximately 20% less than the previous year.
Gezira Scheme:
Ibn Omar warned of the impact of war on the largest agricultural project in the region. He said cultivated area in the Gezira Scheme was reduced to 50% this year, especially for peanut and sorghum crops. Also, major producers and traders left the scheme because there is no large markets for selling the crops.
He concluded that the agricultural sector is fragile and the impacts of war will hasten its collapse. It used to contribute 32.7% to the Sudan’s GDP but its contribution dwindled now to half this percentage as Darfur, al-Gezira and Khartoum States no longer contribute to the agricultural production.
Ibn Omar said the cultivated areas in other parts of the country represent only 37% of the total land prepared for cultivation.
Banking sector:
The banker Abu Ubaida Saeed said the banking sector has been tremendously affected by the war. The banks have been subjected to looting particularly its gold reserves. The same applies to the Sudan’s Mint.
Saeed points out that the value of the Sudanese pound has deteriorated by more than 150% since the outbreak of war in April 2023, a matter that led to the erosion of the Sudanese banks’ capital and thus the loss of their ability to meet the needs of their customers for foreign exchange and financing. Almost 70% of bank branches have been closed.
Most experts and specialists agreed that the effective solution for all these catastrophic war impacts on Sudan economy lies first in stopping the war and then starting the economic reform process.
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