Sudan Businesses Feel Pinch as Currency Devalues, Inflation Soars
KHARTOUM – Sudan this month declared an economic emergency after the Sudanese pound lost 40 percent of its value in one month and annual inflation jumped to 167 percent. Sudan’s transitional authorities have struggled to stabilize the currency, the weakness of which helped fuel the protests against former president Omar al-Bashir. The economic strain has hit traders in the Sajana Market, one of Sudan’s largest.
Sudan declared an economic emergency this month as the Sudanese pound plunged in value and inflation soared.
The pound, which traded at 135 to the U.S. dollar in August, dropped to 250 per U.S. dollar.
The economic strain has hit traders in Khartoum’s Sajana Market, where many businesses sell imported goods.
Most of the market has stopped purchasing fresh inventory as prices soared and goods are overstocked in shops and factories.
Trader Khalif Mukashfi says he’s been forced to close his shop selling light bulbs due to the poor exchange rate.
He says they suffer a lot from the exchange rate and the increased value of the dollar compared to the drop in the Sudanese pound. Mukashfi says local traders buy from importers, who pay with U.S. dollars, and the price is always changing. They can’t meet the changing market price, he says, unless they increase their own prices as the Sudanese pound has sharply dropped.
Economic analysts blame the pound’s fall on government policies that prompted Sudanese to withdraw money from banks and buy U.S. dollars on the black market.
Analyst al-Nayer Mohamed says the policies include increases in fuel and gasoline prices, the second this year, as well as tariffs on imports.
Mohamed says once the policies were declared, the market dropped the value of the Sudanese pound compared to foreign currencies.
Many Sudanese food manufacturers have also stopped production and distribution, leading to a scarcity of goods and higher prices.
Food shop owner al-Hadi Mohiedeen says his shelves are becoming bare as many suppliers stopped deliveries.
He says most of the companies have stopped working completely. Those that still work have doubled their prices, says Mohiedeen, but only operate half as much as before. Even if you buy goods, he says, you’ll see the price double the next day.
Sudanese officials are expected to hold talks with the United States in the United Arab Emirates this week.
Sudan wants the country removed from the U.S. list of states that sponsor terrorism.
Removal from the list would open Sudan’s access to international funding and help start the country’s economic recovery.
Source: Voice of America