Aid slows and inflation grips Sudan amid escalating crises
Diplomats say donors are reluctant to hand over cash to the Khartoum government because of transparency issues
Khartoum/Cairo — Saleha Adam had hoped things would get better after the ousting of Sudan’s veteran leader Omar al-Bashir, and that more food and aid might start flowing into her ramshackle camp on the outskirts of Khartoum.
But a year-and-a-half on, prices are still soaring. And an international package of support for the poorest households such as Adam’s has been delayed, leaving the government racing to stave off more economic turmoil.
“We heard about the (support) plan on TV,” said Adam, who fled to Khartoum to escape fighting in Sudan's Nuba Mountains. But then nothing came of the plan. No cash arrived.
“We need help,” she said.
Crises are piling up for Prime Minister Abdalla Hamdok, who took over after Bashir to head a shaky coalition with the military and become Sudan’s first civilian premier since the 1980s.
There are the problems Hamdok inherited, including the loss of most of the country’s forex-earning oil reserves with the secession of South Sudan in 2011.
And there are the new disasters, chief of all the Covid-19 pandemic. Nile floods have displaced tens of thousands.
Many of the benefits that many hoped would come with Bashir's ousting — above all an end to Sudan’s pariah status and isolation from world financial markets — have been slow to emerge.
A cash transfer plan, funded by donors and administered by the World Bank to help up to 6.5-million families, was meant to start on September 1. The government had expected $400m to start the plan this month, said Adam Harika, Hamdok's economic adviser.
But the World Bank said last week the cash plan was still “under design”.
“We are presently after up with donors on receipt of contributions as per their pledges,” said a spokesperson.
“The World Bank can pay its grant of up to $400m only once they have sufficient donor funds,” said a Western diplomat. “Each government has its own approval, even if they committed only $20m, and this takes time.”
While the US said its pledge of $356.2m would be sent by September 30, Germany has paid only part of its promised $150m with the rest to be distributed by year-end, a government source said. The German ministry for international development said the funds were being paid gradually.
Diplomats say donors are reluctant to hand over cash directly to the government because of transparency issues. They prefer channelling it through international organisations who take time to draw up specific aid programmes.
While preparations continue, prices are rising. Annual inflation hit 167% in August.
And the currency has been collapsing, weakening to 234 Sudanese pounds a dollar on the key parallel market from 140 in July. The official rate is 55.
The pound stood at 75 on the parallel market when Bashir left in April 2019.
Even some of Hamdok’s triumphs have their downside. A much-vaunted peace deal with rebel groups last month involved a promise of government positions for some of those insurgents and funding, pledges that will strain state budgets further.
“It’s a massive expansion of government expenditure,” said Sudan analyst Magdi el-Gizouli. Meanwhile key exports, such as cattle to the Gulf, are falling because the hajj pilgrimage where cattle are slaughtered has been downsized due to the coronavirus, says El-Gizouli. Agricultural production has been hit by lack of fuel.
“We are in collapse right now. There is nothing to avert any more. You have an inflationary crisis. You have a depreciating currency. You have shortages of basic commodities. You don’t even have a proper budget.”
The government has been blaming manipulation by opponents of the revolution that ousted Bashir. They declared a state of economic emergency on Thursday, and launched special courts to prosecute illegal activities.
The donors who have offered support are demanding expensive reform in return, including cutting back popular subsidies.
Soaring food and fuel prices are where the crisis hits hardest for the people in the displacement camps clustered around the capital.
Such hardships are watched closely in Sudan. It was rising prices that fuelled the protests that led to Bashir’s fall.
For now, Saleha Adam is trying to make ends meet by selling coffee and tea in a market in the centre of Khartoum. But the money she earns is far from enough.
“We are all poor and displaced in my district,” she said. “I don't know anyone who gets state support, but we need help to cope.”
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