Referendum bares Sudan's shaky economy

Country's economy feeling the pinch of possible split as currency plummets and prices of essential goods skyrocket.

    Even before the south - where most of Sudan's prized oil reserves lie - secedes, the country's economy is feeling the pinch of a possible split in the upcoming referendum. Its currency is plummeting and prices of bread, sugar and essential goods are skyrocketing.

    Most of the inflation is caused by uncertainty over the future of the North’s economy, which is currently dependent on oil. More than 75 per cent of Sudan's oil is in the south.

    And to make matters worse, the Sudanese national assembly has waded in with a number of austerity measures. They include cuts in subsidies for crucial products - a move that will no doubt trigger a domino effect on prices of a wide variety of goods and services.

    The price of petroleum products that were until now subsidized by the government has also been increased.

    For most residents of the Sudanese capital therefore, shopping these days means choosing only the most essential of items. The rocketing food prices are forcing families to survive on the bare minimum.

    For their bread, Sudan's poor are being squeezed by political uncertainty and rising wheat prices on the global market.

    Sudan imports about two-thirds of its wheat and requires foreign currency to do so. But the Sudanese pound has sharply depreciated in recent months, partly owing to the existing pressures.

    And as the prices continue to rise, frustrations too soar. Saifuddin Bushra, who owns a shop in Omdurman just outside Khartoum, told Al Jazeera:

    “The big merchants and factories are harming the nation. And I don’t know what the government fears. It could be afraid of them.”

    The truth is the government has been struggling to battle the inflation – in its own way.

    Apart from the austerity measures, it has also cracked down on the black market, arresting all those found selling dollars on the streets. It has also injected foreign currency into the market to shore up the weakening Sudanese pound.

    But some believe these measures are not enough.

    “The solution is not to inject foreign currency into the market. The solution is for the government to stop those hoarding goods. The government should also control the prices of goods that are being hiked by opportunist traders taking advantage of the current political situation in the country", said Goc Makuac, chairman of the parliamentary finance committee.

    For now, there is no let up in the economic woes facing the people of Sudan and it’s highly unlikely that things will settle down before the crucial referendum is held and confidence is restored in the economy of the north. 


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