Sudan’s economy … the richest in the dark continent and the majority of people are below the poverty line …..Reasons and treatments

Sudan’s economy … the richest in the dark continent and the majority of people are below the poverty line …..Reasons and treatments

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Researcher Shatha Khalil
Due to the social conflicts and the civil war, the Sudanese economy experienced great successive suffering and other reasons. In 1999, the growth of oil production was significantly affected within the Sudanese GDP, but in a decade the economy in Sudan was booming due to the increase in production Oil, the rise of oil prices and the increase in the flow of foreign investment.
Sudan has no economic problem in the economic sense of scarcity of resources and its inability to meet the needs. The Sudanese economy, which is the wealthiest in the African continent, enjoys many natural resources such as oil and natural gas. It also owns huge agricultural land making Sudan called , the world’s food basket noting that the cotton, sesame ,groundnut and Arabic gum are among the most important agricultural resources in Sudan , and Sudan is the world’s first producer of Arabic gum (80% of world production), and a small stock of iron ore, copper, chromium ore, zinc, tungsten, mica, silver, Gold and uranium, and recently a huge mine was discovered where the Sudanese Minister of Oil and Minerals, Azahari Abdul Qadir announced , the discovery of a huge mine and it is expected to produce 7 tons of gold annually.
Sudan is a vast country rich in natural resources represented in agricultural lands, livestock and mineral resources, forests and fisheries. Sudan relies heavily on agriculture, accounting for 80% of population activity, in addition to industry, especially the industries which depend on agriculture.
The economic crisis in Sudan is summarized as a product of political problems and the accumulation of corruption that has accumulated for nearly three decades, while the majority of the Sudanese people live below the poverty line, and there is another technical and administrative problem that is linked to the political system.
Oil is the lifeblood of Sudan and southern Sudan, after the incontrollable decline of the national currency “pound” and the rise of inflation to the extent of the storm, especially in the nascent state.
The separation of South Sudan in July 2011 formed the center of shock for the economy, because the logic of things was the recovery whenever we moved away from this center, says economist Mohamed al-Nayer.
He says the imbalance in the management of economic affairs, which was evident in the budget of 2018, made the exchange rate and inflation rate one of the most important challenges facing the Sudanese economy after the separation.
South Sudan had accounted for about 75% of the oil production after the separation, which in one year amounted to 500,000 barrels per day.
After the separation, the country was unable to properly structure the economy, as Sudan relied on oil at 90%, which accounted for about 50% of the country’s foreign exchange revenues.
Inflation in 2018 rose by record, exceeding in November 2018 the rate 69%, while the 2019 budget targets a 27% inflation rate.
The instability of the pound’s exchange rate against foreign currencies is particularly noticeable during 2018. Currency fluctuation poses a major threat to the investment climate. For the first time, the Sudanese pound itself becomes a commodity like the dollar, following difficulties encountered by the Sudanese in obtaining their savings from banks and ATMs because of the scarcity of money, and despite Sudan’s vast unexploited resources that attract foreign investment, there are obstacles that make those who wish to bring their money to the country as adventurous in the first place .
According to economic experts, an era before the Naivasha Comprehensive Peace Agreement in 2005 and the years that followed it were the best years for the Sudanese economy, where the dollar exchange rate stood at around 2.5 pounds.

The economic expert Mohammed al-Nayer shows that Sudan – before the secession of South Sudan – was the first African and the second Arab in terms of the volume of foreign investment flows, due to political and economic stability despite the oil revenues were not directed correctly.
He acknowledges that investments are now significantly reduced, and that what will re-flow is the stability of the dollar exchange rate and the reduction of inflation to a single figure.

He added that is possible within two to three years, if followed by correct policies and intervention by friendly countries to inject investments.
Al-Nayyar also stressed that lifting the US economic embargo “theoretically” on Sudan is one of the challenges facing its economy this year 2019. He pointed out that the Office of Asset Control (OFAC) has allowed the Sudanese banks to transfer internationally , but on the ground the embargo is still valid for the survival of Sudan in the list States sponsoring terrorism.
Debt is also a challenge, according to the economic expert , the al-Nayyar , as it exceeded 50 billion dollars (the origin of debt 17 billion and the rest interests ), in addition to the factor of security and political stability.
Experts and observers believe that the causes of economic crises in the country are due to:
• What is happening in the national economy of crises is the accumulation created by the Ministry of Finance to take the wrong policies, most notably borrowing from the banking system and pumping large amounts of liquidity, and the country’s policy must be directed towards reform to avoid the destruction of a rich economy such as the economy of Sudan.
• The need to reduce government spending and reconsider the policies of the Central Bank.
• The need to review the budget of 2018, visit the production areas in the states, and solve the outstanding problems in agriculture, and not to look for foreign loans and leave the resources of Sudan.
• Grant expatriates additional incentives to attract remittances through government banks, and the need to make decisive decisions to stop the smuggling of gold and Arabic gum .
• Addressing inflation. The main factor behind the rise in inflation is the rise in the prices of commodities (mainly foodstuffs), such as domestic wheat, which has risen above the importer, and cereals, sugar and meat, which constitute 56% of the inflation rate noting that there is great variation even in inflation rates.
• The exchange rate in the regulated market during the first quarter of 2018 averaged 18 dollars against 6.7 pounds per dollar during the same period of 2017.
• Political analysts and economists believe that solutions should be introduced to reach real solutions, including the development of the required resources, combating corruption, nepotism, monopoly, dumping and money laundering, in addition to extending financial coverage and activating its mechanisms, activating the supervisory role of the Central Bank for reforming the banking system, and remove the conflict between the laws governing the work of banking and the work of financial institutions, the development of regulation of financial markets and directing them to attract national and foreign savings, and the development of an export promotion program.
• It needs a lot of preparations to work seriously, especially with regard to the issue of external debt.
• One of the most important strategies that Sudan must work on is the reconciliation in the south, and that Khartoum’s initiative to bring together the southern sides is among the steps that brings good benefit for Sudan.
• A problem that needs additional effort, removing Sudan from the list of state sponsors of terrorism, and one of the most important steps that Khartoum must take to remove it .
• Dealing with economic crises before they occur early, the need to reduce consumer goods, correcting the track, reconsideration is not a defect, and the rate of inflation is one of the reasons that must be confronted with production and productivity , and The necessity of using a unified economic media so that the citizen will be able to know the truth of the matter noting that economic treatments that take place are of a security nature, not economic policies that stimulate investment, and the need to deal with and security surveillance for the destroyers of the economy.
• It is also important to pay attention to the remittances of expatriates, by motivating them and establishing a gold stock exchange, rationalizing government spending, which has become a mere word without work, eliminating corruption, returning all looted funds to the state treasury, and enactment of laws , control and transition to the electronic payment system and the need for all states to take care of the economic file and make it one of the first and most important files.
• The Sudanese economy will have a big impact on the African continent and the world, if proper management and planning is followed , despite stumbling, but it will not face negative growth, which is its feature .
• To increase production and productivity, reduce government spending and increase exports, and even revise the budget for 2018 and review economic policies.
• Economic indicators and excessive price increases need to be addressed in addition to addressing the exchange rate of the national currency.
• The existence of economic security to monitor the economic situation, because Sudan is the only country in the south of the Sahara, which does not use fertilizers, indicating that the state tended to extract gold, but could not combat the smuggling, which resulted from the large difference in gold prices externally, and the economists demanded economic reform of economic policies logically and realistically and the need to benefit from the remittances of expatriates through incentives and temptations provided by the state to them, reducing the importance of collecting indirect taxes as not useful, calling them unfair, and that Sudan export trefoil and live animals and imports dairy products , stressing on the need for the development of transformative Industries rather than borrowing from abroad, pay attention to production and productivity, and the Minister of Finance to come down to reality and visit all agricultural production sites and to ensure the arrival of fuel and prepare for the agricultural season because it is Sudan’s only crisis exit.

Economic Studies Unit
Rawabet Center for Research and Strategic Studies